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(1 point) For the following scenario, determine whether the book-tax difference (if any) in 2015 is favorable or unfavorable. On January 1, 2015, Landmark Corporation offered its CFO 2,800 NQOs options to purchase the company’s at the same price offered by the public market on that day, $8/share, at any date in the future after the CFO vests. The CFO will vest 25% of its options in 2015, 25% in 2016, and vest the remaining portion in 2017. The CFO promptly exercised all of his options on December 31, 2017 when he was 100% vested and turned around and sold all the shares for $15/share on the public market. Assume that on the grant date, Landmark Corporation estimated the value of the options would be $7/share. The company uses a calendar year tax period.

The nurse is administering acyclovir and recalls that it is considered the drug of choice for treatment of which viral infection? 

(4 points) Gemini Auto Repair is a calendar year taxpayer. In 2023, the repair shop purchased a light weight truck that it used to drive customers back and forth to their cars while the shop worked on their cars (i.e. for business purposes). In 2024, it sold the truck for a total gain of $34,000 and the accumulated depreciation for the truck was $14,700. What was the character of the 2024 gain on the sale of the truck, assuming that Gemini did not sell any other assets that year and that the shop had not had any Sec. 1231 losses in the past 10 years? If there is more than one type of character that is relevant to the gain, state the specific dollar amount associated with each type of character that makes up the total gain and/or income from the sale transaction for Gemini in 2024.

(4 points) For the scenario below, determine the amount of tax that the shareholder receiving the dividend income must pay on the dividend they receive. All entities below are C corporations. Assume all types of taxable income for a C corporation are taxed at a 21% tax rate. Trinity Corporation owns 65 percent of Salient Corporation. In Year 1, Salient pays out a total of $2.1 million in cash dividends to all its shareholders, giving each owner a dividend in proportion to its ownership percentage.

(4 points) Gemini Auto Repair is a calendar year taxpayer. The repair shop purchased a light weight truck on March 15, 2023 for $39,000 that it used to drive customers back and forth to their cars while the shop worked on their cars (i.e. for business purposes). On August 21, 2024, the repair shop sold the truck for $34,000. Assume that the lightweight truck was the only asset Gemini purchased in 2023. Gemini Auto Repair opted out of Sec. 179 and bonus depreciation for 2023. How much total depreciation deduction did Gemini have from the truck for tax purposes in 2023?

(4 points) Green Bank Corporation follows a calendar year tax period. During its 2024 tax year, the business purchased the following assets:   A desk and chair for each employee: purchased on March 15, totaling $400,000   Desktop computers for each employee: purchased on April 3, totaling $440,000 All of the above property is brand new and has been used entirely for business purposes since its purchase (i.e. does not constitute listed property that has mixed personal and business use). Assume that the taxpayer desires the maximum total depreciation expense for the year possible. However, now assume that the taxpayer claimed no Sec. 179 expense in 2024. How much bonus depreciation will the taxpayer claim in 2024? What is the remaining basis for each of the categories above left after applying bonus depreciation?

(2 points) Which of the following is LEAST likely to protect ALL owners from being personally responsible for business liabilities?

(4 points) Zarbee Corporation’s estimated taxable income this year is $809,000. What is the current income tax expense applying the flat 21% corporate tax rate for the year?

(1 point). For the following scenario, determine whether the related book-tax difference (if any) is temporary or permanent. Ramco Tooling purchased new equipment on January 1, Year 1 for $97,500. In Year 1, Ramco took $27,000 in Sec. 179 expense on the equipment and $15,000 in bonus depreciation on the equipment. In addition, it took $21,000 in regular MACRS depreciation on the equipment in Year 1. For book purposes, Ramco estimates the useful life of the equipment is 10 years and uses straight-line depreciation.

(4 points) Total depreciation – A catering business purchased a light truck on April 5, 2023 to deliver breakfast menu items to local hotel restaurants. The business paid $35,000 for the truck. Determine the total depreciation amount for 2024 assuming the taxpayer opted out of Sec. 179 and bonus (if available) in the year of purchase. In addition, assume all taxpayers use a calendar year tax period and that the property mentioned was the only property purchased in the year of acquisition. Use the appropriate depreciation table from your note sheet/textbook where necessary.