Corporate Tax and regulation | Browse Homework Help

Project description
Complete Part 1 and Part 2 of the exercise below. You will do calculations for Part 1 and will answer questions a-d for Part 2.
Part 1
Amy owns a vacation cottage in Maine. She predicts that the cottage will be used during the current year as follows:
By Amy, solely for vacation 12 days
By Amy, making repairs 10 hours per day and vacationing the rest of the day 2 days
By her sister, who paid fair rental value 8 days
By her cousin, who paid fair rental value 4 days
By her friend, who paid a token amount of rent 2 days
By three families from the Northeast, who paid fair rental value for 40 days each 120 days
Not used 217 days
Calculate the ratio for allocating the following expenses to the rental income expected from the cottage: interest, taxes, repairs, insurance, and depreciation. The ratio will be used to determine the amount of expenses that are deductible and thus Amy’s taxable income for the year.
Part 2
Wright Corporation’s taxable income for calendar years 2009, 2010, and 2011 was $120,000, $150,000, and $100,000, respectively. Its total tax liability for 2011 was $22,250. Wright estimates that its 2012 taxable income will be $500,000, on which it will owe federal income taxes of $170,000. Assume Wright earns its 2012 taxable income evenly throughout the year.
a. What are Wright’s minimum quarterly estimated tax payments for 2012 to avoid an underpayment penalty?
b. When is Wright’s 2012 tax return due?
BU317: Week 1 Corporate Tax €“ The Beginning!
Exercise 1.1
Beginning the Journey
2
c. When are any remaining taxes due? What amount of taxes are due when Wright files its return, assuming it paid estimated tax payments equal to the amount determined in Part A in a timely fashion?
d. How would your answer to Part A change if Wright’s tax liability for 2011 had been $200,000?
Submit a Word document that includes your calculations for Parts 1 and 2.
Submission Requirements:

Evaluation Criteria:
Exercise will be graded for accuracy