Question

Which of the following is more valuable for the tax payer? Kiddie tax credit. $1,000 tax...

Which of the following is more valuable for the tax payer?

Kiddie tax credit.

$1,000 tax deduction.

A tax credit and a tax deduction are the same values.

$1,000 tax credit.

What is the difference between realized and recognized income?

Realized income is taxable in a future tax period, and recognized income is taxable in the current tax period.

Realized and recognized income are the same thing; one is just an accounting term and the other is a tax term.

Realized income is when it is reported on the tax return, and recognized income is when an asset is converted into another asset for a gain.

Realized income occurs when money is earned, and recognized income is when realized income is taxed.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1. (a) Kiddie Tax Credit

Explanation:

Kiddie Tax credit will reduce the tax bills by $2,000. A tax deduction does not reduce the tax bills straight away but reduce the taxable income whereas tax credit reduce the tax bills on dollar to dollar basis. Therefore, tax credit of $1,000 is more beneficial rather that tax deduction of $1,000.

2. (d) Realized income occurs when money is earned, and recognized income is when realized income is taxed.

Explanation:

Realized Income refers to the income which has been received whereas recognized income is defined as taxable income recevied. In cash methd, only realized income forms a part of the recongnised income and taxed accordingly.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
TRUE OR FALSE 1. A user fee entitles the payer to a specific good or service...
TRUE OR FALSE 1. A user fee entitles the payer to a specific good or service from the government. 2. A tax is intended to deter or punish unacceptable behavior. 3. Net cash flow from a transaction equals the difference between cash received and cash disbursed in the transaction. 4. A dollar available today is always worth more than a dollar not available until a future period. 5. The after-tax cost of a dollar of deductible expense to a high-tax...
Which of the following transactions would typically result in the creation of a deferred tax liability?...
Which of the following transactions would typically result in the creation of a deferred tax liability? a. Gross profit on installment sales is recognized currently in pretax financial income but is not taxable for income tax purposes until cash is received. b. Losses recognized in pretax accounting income from an investment in a subsidiary are accounted for by the equity method but not deductible for income tax purposes until the investment is sold. c. Rents received in advance are taxable...
The tax system From a corporation’s point of view, does the tax treatment of dividends and...
The tax system From a corporation’s point of view, does the tax treatment of dividends and interest paid favor the use of debt financing or equity financing? Debt financing Equity financing You bought 1,000 shares of Tund Corp. stock for $75.00 per share and sold it for $77.25 per share within the same year. How will your gain or loss be treated when you file your taxes? As a capital gain taxed at the current ordinary-income tax rate As a...
In the 2020 fiscal year, Company B reported an accounting profit of $1,000. In the same...
In the 2020 fiscal year, Company B reported an accounting profit of $1,000. In the same year, the accounting depreciation expense for plant was $150, while the tax deduction for plant depreciation was $200. There was no other difference between accounting and tax in the year. In the 2019 fiscal year, the company recorded a tax loss ($300) and recognized a deferred tax asset in respect of this tax loss. In the 2020 fiscal year, the company reduced the taxable...
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in...
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) 2021 2022 2023 Subscription revenue recognized (earned) $ 380 $ 380 $ 340 Subscription payments received in cash 420 360 380    The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is...
1) Which of the following is not a characteristic of a qualified pension plan? A) It...
1) Which of the following is not a characteristic of a qualified pension plan? A) It can be limited to highly compensated salaried employees. B) It must be funded in advance of retirement. C) Benefits must vest after a specified period of service. D) It must cover at least 70% of employees. 2) We classify a lease as a finance lease if: A) the present value of lease payments is less than the asset's book value. B) the present value...
Bridgeport Inc. reported the following accounting income (loss) and related tax rates during the years 2015...
Bridgeport Inc. reported the following accounting income (loss) and related tax rates during the years 2015 to 2021: Accounting Tax Year Income (Loss) Rate 2015 $71,000 25% 2016 27,000 25% 2017 61,000 25% 2018 79,000 30% 2019 (220,000 ) 35% 2020 72,000 30% 2021 89,000 25% Accounting income (loss) and taxable income (loss) were the same for all years since Bridgeport began business. The tax rates from 2018 to 2021 were enacted in 2018. Assume Bridgeport Inc. follows ASPE for...
You just bought a newly issued bond which has a face value of $1,000 and pays...
You just bought a newly issued bond which has a face value of $1,000 and pays its coupon once annually. Its coupon rate is 5%, maturity is 20 years and the yield to maturity for the bond is currently 8%. Do you expect the bond price to change in the future when the yield stays at 8%? Why or why not? Explain. (No calculation is necessary.) 2 marks) Calculate what the bond price would be in one year if its...
20.Which of the following usually results in an increase in a deferred tax asset? Multiple Choice...
20.Which of the following usually results in an increase in a deferred tax asset? Multiple Choice Installment sales for which taxable income recognized when cash is collected. Unrealized loss from recording inventory impairments. None of these answer choices are correct. Unrealized gain from recording investments at fair value. 27.Illini switched from the sum-of-the-years-digits depreciation method to straight-line depreciation in 2018. The change affects a tool purchased at the beginning of 2016 at a cost of $79,200. The tool has an...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4...
If you are not familiar with Accounting and Taxation, please do not take this question. Ch4 Q2 A variety of investments is available in the marketplace. What types of investors (clienteles) are most appropriate for (a) municipal bonds (b) hi growth, low dividend stocks (c) lower growth, high dividend stocks? Chapter Summary Different economic activities are taxed differently, even if undertaken in the same organizational form. The unequal taxation of returns affects the demand for investment and thereby affects the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT