1) When a corporation’s S election is terminated mid-year, what options does the corporation have for allocating the annual income between the S corporation short year and the C corporation short year?
2) Compare and contrast the tax treatment for rental income received in advance and advance payments for services.
3) Describe the type of medical expenditures that qualify for the medical expense deduction. Does the cost of meals consumed while hospitalized qualify for the deduction? Do over-the-counter drugs and medicines qualify for the deduction?
4) What types of taxes qualify to be deducted as itemized deductions? Would a vehicle registration fee qualify as a deductible tax?
5) Yordan Alvarez has won the gold bat award for hitting the longest home run in major league baseball this year. The bat is worth almost $35,000. Under what conditions can Yordan exclude the award from his gross income? Explain.
6) Compare how the return of capital principle applies when (1) a taxpayer sells an asset and collects the sale proceeds all immediately and (2) a taxpayer sells an asset and collects the sale proceeds over several periods (installment sales). If Congress wanted to maximize revenue from installment sales, how would they have applied the return of capital principle for installment sales?