ACC 401 ASSIST Extraordinary Success/ ACC 401 ASSIST Extraordinary Success/acc401assist - Page 5

On December 18, 2009, a landlord rents an apartment for $700 per month and collects the first and last month’s rent up front. It is customary that tenants apply the deposit to their last month’s rent upon moving out. An accountant agrees to perform $500 of tax services for an auto mechanic who has agreed to perform repairs on the car of the wife of the accountant. The mechanic repairs the car in December 2009 and the accountant starts and completes the tax work in March 2010. 36. A taxpayer who purchases a Series EE U.S. Savings Bond must report the interest income (i.e., increase in value) on the bond on the date the bond is redeemed or the taxpayer can elect to report the interest currently in income. Under what circumstances should a taxpayer report income at maturity? Under what circumstances is it more advantageous to report income currently? 42. Sean, who is single, received social security benefits of $8,000, dividend income of $13,000, and interest income of $2,000. Except as noted, those income items are reasonably consistent from year to year. At the end of 2009, Sean is considering selling stock which would result in an immediate gain of $10,000, a reduction in future dividends of $1,000, and an increase in future interest income of $1,500. He has a