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What tax doctrine might the irs apply

Task: Mrs. Kanisha is the owner of Kanisha's Sub Shop. In order to lower her taxable income from the shop, Mrs. Kanisha employs her three-year-old daughter as a janitor at a salary of $200 per week.

Q1. Does Mrs. Kanisha's employment of her daughter reflect economic reality?

Q2. Should Mrs. Kanisha be allowed to deduct the salary paid to her daughter? What tax doctrine(s) might the IRS apply to disallow such a deduction?

Q3. Do your conclusions change if Mrs. Kanisha's daughter is 15 and works 20 hours per week in the shop?

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: What tax doctrine might the irs apply

Reference No:- TGS01739651

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Break-even analysis be used by management

Q : Alternatives on a total-annual-cost basis

Q : Determining the type of business entity

Q : Transactions engaged in by a services company

Q : What tax doctrine might the irs apply

Q : Reconstruct the elements of the basic cost-flow model

Q : Depreciation and bad debt estimation

Q : Federal income tax exemption on state-local government

Q : Estimate customer and overall profitability

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Solution Preview :

Prepared by a verified Expert

Accounting Basics: What tax doctrine might the irs apply

Reference No:- TGS01739651

Recent Questions Asked Accounting Basics

Q : Break-even analysis be used by management

Q : Alternatives on a total-annual-cost basis

Q : Determining the type of business entity

Q : Transactions engaged in by a services company

Q : What tax doctrine might the irs apply

Q : Reconstruct the elements of the basic cost-flow model

Q : Depreciation and bad debt estimation

Q : Federal income tax exemption on state-local government

Q : Estimate customer and overall profitability

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