Question
(1) Refer to the news story, California: Dog Walkers Find Millions in Uncirculated Gold Coins Lets hypothetically turn back the clock and pretend that these
(1) Refer to the news story, California:
Dog Walkers Find Millions in Uncirculated Gold Coins Lets hypothetically turn back the clock and pretend that these two lucky dog walkers were your clients. If they had called you immediately after discovering the gold to ask what, if anything, they would have to report about the discovery on their 2014 tax return, how would you have responded, and why?
(2) In 2018 you paid $1 million for a new widget-making machine for your widget-making business. Today, having decided that you need a bigger / faster machine, you sold the used 2018 machine for $500,000.
Now assume that, for the years 2018, 2019, and 2020 through the date of sale, you have or will have claimed exactly $600,000 of depreciation deductions relat-ed to your $1 million investment in the 2018 machine. What, if any, income will you report based on this sale, and why?
( 3) Youre a 40% shareholder of ABC, Inc., an S corporation. ABCs ordinary busi-ness income for 2019 was exactly $100,000. ABC distributed $20,000 to you in your capacity as a shareholder during 2019. On your 2019 Form 1040, you will report ___ of gross income from ABC. Why is that the correct amount?
plz ans asap...
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