Case Study on East Meets West: Business Joint Ventures Essay

* Why would a joint venture partner from a planned economy have difficulty understanding that the consumer is king or queen? Answer: Every economy has its own characteristics as both good and bad as well. In any economy, there are rules and regulations fortified in the manner to help the citizens and so that the businesses can get enough revenue from their customers. As we see in today’s world, we can see that only the open economies are getting through the international competition and sustaining in the long run of multitasking operations. As in a planned economy like Soviet Union, Marxism-Lenism had some limitations too. Usually there are not many competitors and whosoever the businesses are; the procedures are controlled directly by the govt. The businesses started to think that customers will have to buy whatever they offer because they have not much of alternative choices. Maybe that can be alright for their country but not sustainable for any other country in this world. On an open economy, businesses understand, they have to satisfy the customers only and customers have a set of choices and alternatives available in the market. If their business can’t offer something much superior or different, there revenues will suffer. That’s why, because of the understanding of the business, they treat their customer as kings or queens. * Could a small business owner tolerate a business deal that had little probability of being profitable within the first 10 years? Answer: Small business owner doesn’t mean the entrepreneur doesn’t have any other businesses or way of earning. But if the business is only the way, of course no one will be able to tolerate this kind of business deal. Usually these kinds of deals are inevitable in industries like real estate, long term investment firms etc. There are not much information here about a planned economy right here and we can’t see how much they appreciated the FDIs is in their land. But in an open economy like most of the economies of this world, there have to be revenues actually. The businesses will have to pay their costs and maintain their operations running at any cause. At least their have to be sales enough to maintain both the variable and fixed costs of the business, If there are not much of profits, the business won’t have to pay much tax rate but if there are loans and financial debts, they will have to pay a certain percentage of their profits and if the forecasted profit s are not enough to pay, eventually they won’t get any kind financial help from any financial institution. As 10 years is a long time to build brand equity to the customers in an open economy, any one of the ventures can be impatient and break the deal. At any cost, maybe not for two years, or 3 years, the profit must come then enough to occupy the market and satisfy the contractors. Usually, for the first years of a business firm, they invest in getting brad equity and setting up customer loyalty and also in understanding the consumer behavior in their current operations. But this is brand management in their long term investment. But eventually, in joint ventures any one of the parties are sustainable and able to run their operations and known to be at least a provider of a certain group of customers. Profits may not come to be a point in these areas of generation but when the venture is formed and ready to serve the market, after calculating the time to build a level a brand equity and CRM, they must obtain profit to run their business enthusiasm. Even of there are big business owners. I suspect if they will be able to deal with such improbability. * Why have few Americans been willing to enter into joint ventures with Soviet partners today? Answer: As the situation provided is due to the environment in mid-1991, there are certain points to consider. We know that, in mid-1991, the recession of US was ended. Thus many companies who was facing a huge amount of loss got their heads up and start their operations again. In the 1990s, Gorbachev’s policy of perestroika offered the people little in substantive, near-term economic improvement, and his policies of demokratizatsiia resulted in rapidly raising their expectations while lessening the regime’s controls over society. As a result, in mid-1991 the Soviet Union appeared to be a disintegrating federation with a collapsing economy and a despairing, confused society. In August 1991, Bush and Gorbachev signed the Strategic Arms Reduction Treaty, which required the United States and the Soviet Union to cut their nuclear weapons within seven years so that each side would have only 4,900 ballistic missile nuclear warheads as part of a total of 6,000 warheads. The two countr ies had been engaged in the Strategic Arms Reduction Talks (START) since 1982. In another collaborative effort, the Soviet Union voted with the United States and an international coalition of nations to oppose the invasion of Kuwait by Iraq, a nation that had been the recipient of substantial amounts of Soviet military advice, equipment, and weapons. There has been a lot of changes in USA and Soviet Union constitutions on that time, maybe the destruction of weapons and an urge of being able to dominate each other’s economy, they came close to get to business relationships. Both of them were two of the most powerful part of the world and maybe one of them was trying to dominate the other but these are political overlooks. The business point of view strategizes the collapse of socialism in Soviet Union and because to the law changes in the field of business policy, there could be alliance powerful enough to understand the multinational consumer behavior of the other countries. Maybe those are the reasons why there has been so much eagerness of these countries to come close in professional relationships and diplomacy. References: 1. Soviet Union, Country Data, http://www.country-data.com/cgi-bin/query/r-12406.html 2. Business for the 21st century by Steven J Skinner and John M. Ivancevich.2003.

Analyzation of Emily Dickinson’s Poetry

Succeeding in life, or achieving one’s own goals, seems to be the central theme in everyone’s life as is in Emily Dickinson’s poetry. Dickinson expresses the lessons learned in life throughout her poems. There can be many hardships and obstacles preventing one from their own succession. The prevailing of these obstacles leads to one’s success is life. In the poem â€Å"’Hope’ is the thing with feathers†¦Ã¢â‚¬  Dickinson uses a bird metaphorically as hope. The feathers as she tells are the hope in a person.The feathers create the wing and let the bird fly so in a sense it’s as if hope is lost in one place and can be found in another, as if flying to a new hope. In another sense somebody’s wings, or hopes, can be broken down by life’s hardships which can lead to a sense of hopelessness. Hope perches in the soul which Dickinson uses as the home of the bird, perch, and the soul metaphorically. The bird lives from suppo rt of its perch; one’s hope is within one’s soul.Without the support of the perch the bird’s nest will fall. Without the soul, one loses hope in everything that means something to them. And sings the tune without the words; and never stops-at all†. Dickinson continues to use a bird as a metaphor for hope, but in this stanza she speaks of the bird’s singing. The bird’s song is also used for hope. The bird â€Å"never stops-at all† is referring to the song and one’s never ending hope. â€Å"And sore must be the storm†¦Ã¢â‚¬  is used to refer to the guilt and pain somebody or something that crushes the hope that others will feel. â€Å"I’ve heard it on the chillest land; And on the strangest Sea; yet, never, in extremity; it asked a crumb of me† (Dickinson 9-12).Rad also  We grow accustomed to the darkIn the last stanzas of the poem, Dickinson, refers to hope as being able to be found everywhere, or in the ch illest land or on the strangest sea. Hope will be there for you and won’t ask anything from you. There should be hope in everyone who has a soul. This hope that is felt is for the continuance of one’s life because without hope, one does not succeed in what is to be accomplished; life. Success is the goal and key to life. Success can differ from person to person based on what they want to achieve. â€Å"Success is counted sweetest; by those who ne’er succeed†¦Ã¢â‚¬  (Dickinson 1-4). This can also be made as a reference to envy.People want what they do not have. To feel success at its sweetest, â€Å"to comprehend a nectar† one must feel the â€Å"sorest need† or great hardship either through failure or with obstacles. Overcoming these obstacles will lead to one’s success and to some, success is the sweetest to those who cherish the opportunity. The â€Å"Purple Host† who took the enemy flag does not know victory better than the defeated enemies. â€Å"As he defeated-dying; on whose forbidden ear; the distant strains †¦Ã¢â‚¬  Dickinson explains in the last stanzas of her poem that the defeated army understands the success of victory better than the victors.The reasoning behind this is that in order to understand the feeling of succeeding one must feel failure first to truly understand triumph. The victors do not know failure, which in this case is death, which Dickinson states will prevent them from understanding triumph or success. Succeeding in life to some is to become recognized and to be known by the public or achieving fame. â€Å"I’m nobody! Who are you,† Dickinson was not known by the public through her lifetime and she dreaded her infamous life. â€Å"Don’t tell!They’d banish us-you know† refers to not being accepted by society and being out cast for being different than others. â€Å"How dreary-to be-Somebody; how public-like a frog; to tell your name-the livelong day; to an admiring bog! † (Dickinson 5-8) is a reference implying that her private secretive life is of her preference. Being secluded is better than being in the mess of things. â€Å"How public like a frog to tell your name the livelong day†, so she’d rather not have to worry about keeping a good name if it’s going to be a nuisance to her, â€Å"To an admiring bog†, which she refers to as the judging public.The success she wishes to achieve is for her and not for anybody else. Achieving life’s goals should be for one’s own satisfaction. Emily Dickinson’s poetry can be referenced to many things in life. Succeeding in life, to one’s preference, seems to be the central theme in her poetry. Whether it’s hope in succeeding, failing to learn to succeed, or achieving fame from your success, everyone has goals to achieve. These goals will lead the succession in life.

Why All Children Should Play Team Sports Research Paper

Why All Children Should Play Team Sports - Research Paper Example One of the benefits that are commonly attributed to team sports is that such sporting activities teach children how they can best work well with others. As long as they are on a team, team sports teach children that it is imperative for them to think as a whole instead of just themselves as individuals (Dunlap, 24). They are able to learn how to be happy or their teammates’ successes in addition to their own; this is because every person’s success is of great benefit to the team. A team sport can teach children how to interact with their peers and instills in them the value of respecting their coaches and fellow teammates. They are also able to learn empathy for others. Playing team sports is an avenue through which children can be able to learn from a number of other positive mentors other than their parents. While on a team, children are able to learn how to respect the coach and honor his final decision. By noticing the various strengths that each individual player i s able to bring to the team, children are able to learn how to respect and appreciate each other’s talents. This sense of teamwork, organization and following skilled leaders not only helps children in the classroom but also in their work as they continue to grow. Another benefit that children stand to benefit from as a result of participating in team sporting activities is that even though their athletic prowess might not be quite impressive, children that participate in team sporting activities are often more likely to be hardworking, active students and better future leaders. This is because organized athletics often require that these children learn how to lead others and be disciplined during practice.

Leadership and the future Assignment Example | Topics and Well Written Essays - 250 words

Leadership and the future - Assignment Example Grossman is concerned with the quality of medical care in nursing homes and those of elderly residents in their homes (Grossman, 37). Nurses are usually in charge for the delivery of such care in the centers or the patients’ home. Nevertheless, the number of aged patients existing in the nursing homes rose considerably in the 1990s and late 1980s. This has resulted in a rise in the workload of the nurses who are sometimes forced by circumstances to take care of more than one patient. Patients with a disability and high morbidity have also increased pressure on the available human resource, (Wick, 46). I have personally, played a significant role in the development of the nursing field. I came up with the generation of value indicators. This system is used to measure the explicit process criteria. In this strategy, the care given to patients is measured against the explicit quality indicators or standards that result from the care. The indicators are selected on the foundation of their significance to the nursing industry. In addition, information is to de delivered to the registered nurses to support each of the quality indicators. The American Nurses Credentialing Center (ANCC) is the worlds leading training organization for the nurses. This organization validates nurses’ skills, abilities, and knowledge. The ANCC board recognition and certification empowers qualified nurses within their specialized spheres to active contribute to the delivery of quality medical care to patients’. The ANCC is an auxiliary organization to the American Nurses Association (ANA). It provides financial support to organizations and individuals to help them further their skills and competence, (Marx, 87). One is expected to gain the relevant work experience after graduation over the years as he or she sharpens the skills acquired in class. My strategy to improve the quality of nursing health care for the next decade is based upon three basic

Impact of Media on Society Essay Example | Topics and Well Written Essays - 750 words

Impact of Media on Society - Essay Example The media can affect women negatively through their desire to want to look â€Å"beautiful† like models and presenters on television. In different forms of media, women are shown as having an ideal body type (Sands, n.d.). Over a long period of time after continually seeing thin and beautiful women, it has to have an effect on the average woman in society. This can be seen from when little girls get their first Barbie doll; why is every Barbie doll sexy, slim, and are revealing? (Sands, n.d.). The reason is that the media fuels this desire by promoting it as normal. Young girls are susceptible to these types of media because they do not know how to differentiate between the truth and exaggerated truth. Going a little further, the media often plays up the sexualisation of women. This can be shown in many movies, where women are shown to be sexy and powerful. This inadvertently has an effect on women who watch these movies because they then feel like they need to act in the same way. The average model in the fashion industry is young, tall, and slim (Sands, n.d.). This can often lead to anorexia among young girls because they feel like they have to look exactly like those models that they see on fashion catwalks around the world. Another group of society that the media negatively affects is young people, namely teenagers. ... MTV is the most obvious example of this. Research shows that teenagers who watch a considerable amount of MTV have very relaxed attitudes about sex (Williams, 2004). This shows that there is a direct link between teenagers’ behaviors and what they watch on television. The last group in society that the media affects negatively is children. Violence is one of the key issues with children and the media. Research shows that children who play video games reguarly are more likely to be violent later on in life (Tompkins, 2003). Besides this, violence is often displayed on programs that children tend to watch. While this does not have the same effect on children as video games, it can still affect their behaviors when they reach adulthood. Violent behavior will often lead to prison or will affect them socially. Parents need to censor everything that their children watch on television because it may cause them to show violence towards others. The media can be used to benefit society if it is done in the right way. It is not likely that the media’s impact on society will diminish anytime soon, so it is important that the message is changed to only have a positive effect on a society’s citizens. The media can increase society’s knowledge as long as it remains unbiased and presents information that does not negatively affect three groups: women, teenagers, and children. References Sands, B. (n.d.). Mass Media Has a Negative Impact on Women. Retrieved from Teen Ink: http://www.teenink.com/opinion/pop_culture_trends/article/225891/Mass-Media-Has-a-Negative-Impact-on-Women/ Tompkins, A. (2003, December 14). The Psychological Effects of Violent Media on Children. Retrieved from AllPsych Online:

Health and Social Care Essay Example | Topics and Well Written Essays - 1250 words

Health and Social Care - Essay Example Unfortunately, the theory was criticized for its inability to explain how humans organized and perceive sensations (Jarrett, 2012). Gestalts theory attempted to solve this inadequacy by validating that the mind organizes sense stimuli in order to produce perception holistically. However, the functionality focused on the functionality of the mind as opposed to the structures. This theory was influence by Darwin’s theory of natural selection thus it focused on the adaptive behavior values. The above theories were limited to the conscious part of the human mind. This prompted Sigmund Freud through the psychoanalytic theory to incorporate the unconscious part of the mind as a crucial part of psychology. The theory assumes that humans are similar to animals since they both have sexual and instincts which motivate behavior (Chadee, 2011). In contemporary psychology, psychological approaches entail some assumptions on human behavior. Despite the existence of several perspectives, there is none that is more correct then the other as each possesses certain strengths and weaknesses (Campbridge Technicals, 2015). Perhaps this is because of their various facets of approaches to the comprehension of the human behavior. The different psychological perspectives are behaviorist perspective, humanistic perspective, psychodynamic perspective, cognitive psychology, biological psychology, evolutionary perspective, and socio-cultural perspective (Jarrett, 2012). This perspective illuminates how humans (animals inclusive) are controlled by the environment. Their behaviors are as a result of what has been learnt from the environment. These environmental factors are referred to as stimuli that influence human behavior. In this scenario, the human behavior is a response towards the stimuli. The approach encompasses the classical conditioning and operant conditioning as that

The OJ Simpson Trial Research Paper Example | Topics and Well Written Essays - 1250 words

The OJ Simpson Trial - Research Paper Example Simpson was a retired football player and a resident of California. Simpson is one of the black Americans who surpassed racism and proved success together with Oprah, Wesley, and Spike during the 90’s. Nicole and Ronald who were the victims of double murder were both belong to the white race while Simpson who was the main suspect belongs to the black race. Some of the questions raised in the minds of the Americans and the rest of the people in the world is whether he would be found guilty or not, is he responsible of the crime, is there a manipulation on the part of the cops who has the access on the crime scene, and the last but not least is whether he’s status of being a celebrity would affect the verdict? On the other hand, the verdict about Simpson seem to ignite issues whether Simpson was judge based on evidence, popularity, and race for those who believe that he was guilty and for those who believe that he is not. The DNA evidence against Simpson was weak accordin g to those who stick beside him and was just a product of the discrepancy that the LAPD sponsored because of racism. Who is O.J. Simpson Orenthal James Simpsom was born on July 9, 1947 in San Francisco California. He is a member of the American Black with straight hair. He is an actor and a football player and one of the most important personalities that the America has. Simpson was the son of Jimmie Lee Simpson and Eunice Durden. His first wife was Marguerite Whitly whom he had the son Jason and daughter Arnelle and Aaren. He had a second wife, Nicole Brown Simpson who was murdered. They had a son Justin and a daughter named Paula. Investigation of the incident On June 12, 1994, at Nicole Brown Simpson’s condominium, her neck was slashed and a friend who accidentally dropped by was stabbed around thirty times. It was said that the suspects, male, used the back entrance of the said condominium along with the popular Brentwood area of Los Angeles. The body of the two victims w ere discovered by the neighbour who led to the investigation of the Brown-Simpson and Goldman investigation. Police informed Simpson about the death of his ex-wife and gave no reaction about the details of the death and later claims that he reacted through smashing a glass that made his left hand cut. The investigations about the incidents focused on Simpson, equating the wound on his left hand to the incidents. The series of interviews and investigations done by the officers were incompetent claim by the police. Eventually, after the police accumulated enough evidence that would indicate Simpson’s guilt in the murders, he was issued a warrant of arrest. Simpson Promised to submit himself at the police station but instead, he disappears until he had been hunted down. The prosecution filed the case in the Downtown district and not in the town where the crimes happened. However, the filing of the case is considered a mistake because the case should be filed in the district wher e the crime happened. It was said that one of the reasons why the litigation of the case was continued at the downtown was through the believed that the case against Simpson was strong and the jury of the downtown would have no choice but to convict Simpson. During Simpson arraignment on July 22, 1994, Simpson answered the question â€Å"How do you plead†, and his answer was â€Å"

Why did Hurricane Katrina effect women more then men Research Paper

Why did Hurricane Katrina effect women more then men - Research Paper Example She thought that it would only be best if she give away her baby in order for it to have improved chances of survival. It is still not known whether the mother and her child reunited or are still separated. From these stories, one thing beyond doubt is that the people who suffered mostly from the disaster are women and their children (Tarshis, 2011). Women in New Orleans formed 54% of the population. Women made up about 80% of the individuals left behind to take care of themselves after the storm. More than one in five women residing in New Orleans, and 15% of every family in New Orleans live below the poverty level compared to 14.5% countrywide. Single, mother-headed households form 56% of all families in New Orleans (Butterbaugh, 2005). Half of these families live below the poverty level. These classes of women were living on these limits even before the calamity struck. After the disaster, matters got much worse than they were before the disaster. In conclusion, women were the worst hit group by the hurricane. It would have been only fair to consider them more in the relief programs since they deserve to be

Financial Analysis of Durango Manufacturing Company Research Paper

Financial Analysis of Durango Manufacturing Company - Research Paper Example Durango Manufacturing Company is a firm that deals in manufacturing of a variety of products and the supply of industrial products. The firm deals in aircraft manufacturing, apparel manufacturing, automotive manufacturing, chemical and allied products, glass manufacturing, home and garden supplies, industrial importers and exporters, paper and pulp, railroad manufacturing, and other forms of manufacturing. The organization has in the past received Best Business Bureau (BBA) accreditation, which recognized their relentless commitment to making strenuous efforts of satisfying consumer complaints. The award considers the period of time the business has been in operation, the amount of information available concerning the business, and most importantly, there should be no consumer complaint filed with the Better Business Bureau (Csaszar, 2012). Durango manufacturing company’s Chief Executive Officer (CEO) does not have sufficient expertise in financial management and creating valu e for the firm’s various stakeholder groups. ... Corporate finance is crucial as it defines how organizations fund their activities and achieve their goals and objectives. Organizations are always faced with a dilemma between re-investing their excess revenues or using it to pay shareholder dividends. An ample financial literature is crucial as it enables chief executive officers to rationally appropriate the finances of an organization while maintaining high quality shareholder relations. The Chief Executive Officer (CEO) of Durango manufacturing limited should seek financial training to enhance his financial literature. The firm is a large multinational firm with extensive financial implications. Also, the magnitude of its daily operations represents a relatively large financial risk that requires high-tech financial management expertise. Because of the complexity of the organization, the managing director should seek training in financial management or management accounting. Management accounting comprises the provision of finan cial information, as well as the financial advisor to a business (Brigham & Ehrhardt, 2013). Financial management starts with the management of financial information (Bhat, 2008). Financial information refers to data like credit card numbers, account balances, credit ratings, and other monetary details concerning an organization, which are used in implementing various activities like credit assessment, loan transactions and sundry. The chief executive officer should know how to process financial information to safeguard Durango Manufacturing Company profile from bad publicity associated with financial misappropriations.  

How to get a Grant up and Running Essay Example | Topics and Well Written Essays - 500 words

How to get a Grant up and Running - Essay Example a Seriousness, the co-chairperson of the Grants Committee said that, â€Å"We need to use this grant money to fund studies and to create pilot programs which can become self sustaining with regard to prevention and education concerning the problem of underage drinking in the Air Force†. Jack Notso, the co-chair of the grants committee was briefer in his statement when he said, â€Å"We finally got the money. Let’s see who deserves it†. This is likely to be an important question since there are individuals within the organization who have presented their own ideas with regard to what could be done with the money for the grant. A poster and media campaign targeting the Air Force had been suggested earlier but was turned down on account of being too broad. Another plan for implanting experimental medical monitoring chips within the bodies of underage Air Force officers was also turned down when ethical and privacy related questions came into play. The grants committee is looking for workable solutions which will have the least impact on the lives of Air Force officers while giving them awareness about the issue and teaching them the idea of responsibility with regard to underage drinking. This is certainly a problem which needs a solution but no quick fix or partial solution will be acceptable to the organization. It is clear that the organization is looking at the long term when it comes to solving the problem of underage drinking in the Air Force and that the projects or studies conducted under the grant should be self sustaining after the initial funding has been provided. More information about the grant and the application forms are available from the website or the offices of the organization. The grant request statement has to explain why the grant is being requested as well as give a detailed outline of what the money would be used for. Practical solutions that can sustain themselves for a number of years are to be given priority over studies and research

False Catholic Beliefs Essay Example for Free

False Catholic Beliefs Essay The two authors namely Gross and Blackbourn made an account about German Catholicism in the 18th Century. Their works: â€Å"The Strange Case of the Nun in the Dungeon and Apparitions of the Virgin Mary in Bismarckian Germany†, respectively are expositions of how the noblest human acts and beliefs can be turned into atrocities and monstrous behaviors if that self giving is overshadowed with power or other ulterior motives. Freedom of Religion is man’s greatest endeavor to fulfill his end. However, if the means to achieve the end becomes evil it no longer serves man’s purpose but becomes destruction to man’s life and being. In the case of the nun Barbara, it is so unlikely that someone needs to be locked up for 21 years simply because that woman can not live her state in life. The vocation to celibacy is a free gift and not given to all. In fact, the best place for a woman is still in the home. Is the nun in the dungeon really insane or just maltreated? What is the real reason why she was in the nunnery? Again, in those questions it is no longer a reason if she is a madwoman but her lack of freedom and those people around her who were influenced by evil or may used coercion as force needed to be looked in depth. What made this people think that way, and what kind of a leader or a superior does her congregation have? Was it is because her time was during the Dark Ages in Christianity where people are kind of confused? Could it be also a time in the history of mankind that the female gender is not absolutely understood? On the accounts given by the authors especially that of Blackbourn, when he tried to gather information of the German Madonna, he pointed out on the common beliefs of that time and was able to conclude that the apparitions is not real. This is another lesson to bear in mind that popular beliefs are not always the bearer of truth. Human at the same time is so fallible, that if guided by a blind guide can be trapped into a pit. The two authors have manifested in their works that man to be rational must be free and knowledgeable of the truth. References Gross, Michael B. (2000), The Strange Case of the Nun in the Dungeon : German Studies Review [Electronic Version]. Retrieved 22 February 2008 from, thttp://links. jstor. org/sici? sici=0149-7952%28200002%2923%3A1%3C69%3ATSCOTN%3E2. 0. CO%3B2-N Blackbourn, David, Apparitions of the Virgin Mary in Bismarckian Germany

Government-operated gambling Essay Example for Free

Government-operated gambling Essay Over the past few years, government operated gambling has grown into a massive business, there has been much controversy around the topic of weather or not Gambling should be regulated. In this essay I will explain my point of view on this topic and give examples that support my ideas. So, what should the state’s policy towards gambling? I believe that the state should not regulate gambling because of three main reasons. My first reason is people’s rights and freedoms. Second, Gambling has grown into a major industry over the pas few years; the centre for addiction and mental health stated in their Gambling Policy framework in 2011 â€Å"Government-operated gambling has steadily expanded in Ontario in the past two decades, revenues reaching $4. 7 billion in 2009. † (2). This shows that Gambling has grown to become a major industry in today’s economy and by doing so it has helped society in several different aspects, the growth of the gambling industry has lead to an increase in revenue for the government, thus resulting in more social benefits towards the public. Finally, The gambling industry has lead to many job opportunities in north America, offering a beacon of hope to those in need of jobs during a recession. In modern society, freedom is not only supported but also cherished, people should be given the freedom to live their lives as they please, weather they choose to live their lives in a healthy way or not that is up to them. However, they must be given the right to live as they please. In the United States, groups such as the KKK are protected under the first amendment, which protects their freedom of speech, no matter how ludicrous it may be, they have the right to say as they please. The same should be applied to life. People should have the choice to live their lives as they please without being watched over by the government. Since gambling does require participants to be of legal age, we know that the people gambling are adults. These grown ups should be able to have control over their own lives, its their responsibility to understand the chances they are taking when gambling. Some may argue that certain people can’t control their gambling problems and have gotten too addicted to gambling and that casinos take advantage of these people. These claims are supported by some statistics given in the centre for addiction and mental health, which states, â€Å"it is estimated that between 30% and 40% of Ontario’s gambling revenues come from the 3% of the population with gambling problems† (2). This statistic shows that the gambling industry does heavily depend of the people addicted to the game. I would respond by expressing two points. First, the people with gambling problems of which they cannot control are a minority, in Jonathan Wolff’s â€Å"Ethics and public policy A Philosophical inquiry†, the author states that â€Å"between 0.6 and 0. 8 of the UK adult population could be classified as problem gambles† (59). Furthermore, in the centre for addiction and mental health’s Gambling Policy framework in 2011 that â€Å"just over 3% of the province’s population experiences moderate to severe gambling problems. †(57). These numbers do not justify having to discipline an entire industry that would affect hundreds of thousands of people that work in it and making their living off jobs in that industry. Second, increasing government regulations on casinos and lotteries will not stop these problem gamblers from gambling. Jonathan Wolff states â€Å"in the late 1950s there were towns about 25 percent of the adult population gambled illegally on a regular basis. †(55). Taking this point into perspective, it could be inferred that if the government increases the regulations on legal casinos and lotteries that would make it harder for people with an addiction to gamble, these people will find other ways to feed their addiction. This is a severe problem because when these people begin to gamble illegally they will put their money into other illegal activities, which could include drugs, weapons or violence. In fact, many large gangs could use this opportunity to fund their illegal activities, which would lead to more trouble in society; another point to be made towards this issue would be that of money, not only would these gamblers be putting their lives at risk when gambling illegally and dealing with gangs, but they could also be keeping this money out of the government’s hand which could go government programs to help the less fortunate. This brings me to my next point and that is that gambling has become a major source of revenue for the government. Government regulated gambling has grown into a massive industry which generates a significant amount of revenue each year of which most ends up in the government as funding for many different organizations. in the paper named â€Å"Gambling: Its Pleasure and costs† by Lorne Tepperman it states that â€Å"The industry group’s report says 57 per cent of gambling revenue $8. 7 billion- supported government services and charities. † (9). Tepperman also states that gambling is the â€Å"most financially significant† (9) segment in entertainment and that it contributes â€Å"$15. 3 billion a year to the economy, according to the Canadian Gaming Association. † (9). Ronald Pavalko also states in his paper titled â€Å"gambling and public policy† â€Å"State revenues from casino taxes totaled nearly $3. 5 billion. † (336). The reality is that today, we are in a recession we can’t afford to decrease that revenue by implementing harsh restrictions on gambling. It is argued that even though gambling is a major source of revenue for the government, it is also a source of misery for people with gambling addictions. The centre for Addiction and Mental health states that â€Å"For these individuals, a range of harms may occur, resulting in heavy social, economic, and health costs such as crime, dysfunctional relationships, and bankruptcy. † (2). However, the solution to this problem is not adding restrictions to gambling but is actually using the money made from gambling towards a better cause. As I have previously stated, people addicted to gambling will not be cured from their addiction by regulating legal gambling because they will find other means to feed their addiction. I believe that the best solution to these people’s gambling problem would be using the revenue that they generate for the government in taxes could be used to create social programs for people with serious addictions to gambling that would help them quit. I believe this solution would be ideal because the minority of people with gambling addictions will be treated in a proper healthy way in order to get over their addiction, the left over revenue could still be used in other social programs and finally, the money and profit that the casinos and lotteries generate will still flow which would result in more jobs, another source of income to the economy and would prevent people from getting fired from their jobs if harsh restrictions were to be applied to gambling agencies. My final argument for this essay is that of employment. As previously stated, gambling generates a huge amount of revenue for the government, Gambling is a growing industry and with its growth it creates several opportunities for jobs for people in need. Gambling generates many jobs that help the economy grow in this time of need. Gambling generates jobs of all sorts, from the engineers and architects that build and design the casinos, to the people who sell lottery tickets, to those who actually work in casinos. All of these people generate their income because of the gambling industry. Tepperman states that in Canada gambling accounts for â€Å"267,000 full time jobs. † (6). Pavalko also states in his paper that in only eleven states a total of 370,207 people are employed in casinos, In a country with a current unemployment rate of 8%, the Gambling industry should be seen as a source for solutions to a much more serious problem than an addiction to gambling. Expanding the gambling industry will in return create more job opportunities and help decrease the unemployment rate dramatically. However, if the government begins to set harsher policies towards gambling and casinos are required to cut costs, the unemployment rate might increase which would create even more social issue, which could result in protests and riots from the workers who have lost their jobs due to the harsh policy towards gambling. Some might argue that Gambling still creates harm towards many people and even though it can create jobs it can also result in many people losing their jobs. I would respond by quoting Lorne Tepperman â€Å"A majority of adults gamble responsible; only a small minority of the population experiences gambling related harm. † (1). I believe that gambling will create more jobs that it will end and that that is just a minor side effect that could be easily cured by the revenue that gambling will generate for the government, this money could be put back into society and produce new projects that create new job opportunities and these jobs could be offered to those who had lost their previous jobs. In conclusion I would say that I do not believe that the government should regulate gambling because of the reasons that I have stated earlier in this essay. First, Gambling is a choice and freedom. It a civil right and the government should not be able to decide weather or not you are allowed to gamble or how much you are allowed to gamble. Second, Gambling has grown into a major industry and has become a major source of revenue to the government. Gambling has helped fund many government programs used to help the less fortunate, even though gambling does create certain people who are addicted to it, they are nowhere near as many as the people whom gambling helps. In this situation the pros drastically outweigh the cons and as previously stated, the revenue generated from gambling could go towards social programs made to help people with gambling addictions, that way these people will eventually cure themselves of their addiction and the hundreds of thousands of people whom depend on gambling a source of income would not be affected, which is what I believe is a win-win situation. This brings me to my final argument, employment. The gambling industry has created hundreds of thousands of job opportunities to many of those who need it, especially in a recession where millions struggle to find an income support for them and their families. I would say that the government should encourage gambling businesses to grow. However, as Christiane Pouline states in his paper titled â€Å"Gambling† that â€Å"Decisions on policy pertaining to gambling need to be based on a full accounting of the health, economic and social benefits and costs of gambling. † (1208). Which is why the policy towards gambling should be set to help both the gambler and the Casinos. That policy should state that a majority of the profit that is generated from Casinos should go towards social programs that will benefit society; these social programs should include programs made to help gambling addicts with their problems. James Doughney perfectly sums up this policy in his book titled â€Å"The poker machine state†. Doughney says, â€Å"Try to do good; but even when you cannot at least do not knowingly cause harm. † (1). Over the past several years, gambling has grown into the largest sector of the entertainment industry, creating the most amount of revenue to the government. Our society should be scared of this phenomenon and try to regulate it, we should actually take advantage of it and use it to help make the most the most of this opportunity by using the money made from gambling to improve our lives and the lives of those around us.

Business Opportunities In Ethiopia Economics Essay

Business Opportunities In Ethiopia Economics Essay As there are lot of business opportunities in Ethiopia in different sectors, as it is not possible to address all of them. But try to concentrate and search opportunities on some of basic and important business sectors for foreign investors 3.1 Business Opportunities in Manufacturing Sector The manufacturing sector plays an important role in economy of Ethiopia it has almost a share of 5% of GDP and 37.8% to the annual output value of industrial production in 2008/09 (Central Statistical Agency Statistical Abstract 2009). The important manufacturing sectors in Ethiopia are  production of food, beverages, tobacco, textiles and garments, leather goods, paper, metallic and non-metallic mineral products, cement and chemicals.  The production of textile and garments, leather products and agro-processing are one of the most important areas for investment, because of its geographical advantage of easy and fast access to Middle-East and Europe. In manufacturing section we discussed on business opportunities in textile and garment industry and leather product. 3.1.1 Textile and garment In 1939 under the Italian government supervision and technology, the first textile factory was opened. Presently the current textiles industry involves in the process of spinning, weaving and processing. Ethiopia has five public textile factories producing mostly work-wear garments for the domestic market. Numerous privately-owned factories produce shirts, suits, work clothes and uniforms for national and foreign markets. Ethiopias textiles and clothing industry is undergoing major development, aided by the presence of a cheap, skilled and highly-motivated workforce. This surge has been helped by the countrys impressive economic growth over the past years. Ethiopias enormous export potential is made possible by the wide availability of raw cotton and other natural fibers and Ethiopias access to domestic, regional and international markets. The basis for the full cycle of business opportunities and the enormous growth potential for the textile industries is the local production of cotton. Large-scale production is carried out under irrigation, mainly in the Awash Valley, which has more than 50,000 hectares under cultivation. Another 45,000 hectares of high-quality cotton is cultivated by small-scale farmers. There still exists huge potential for the expansion of cotton cultivation in Ethiopia, especially in the Omo-Gibe, Wabi Shebelle, Baro Akobo, Blue Nile and Tekeze River basins. The production of cotton is well integrated into the textile sector, with garment factories relying heavily on domestically produced cotton. Available within Ethiopia are all essential ingredients for a competitive textile industry: raw materials, low wages and low energy costs. This gives the country a comparative advantage over other countries and regions. The Ethiopian Government is actively promoting the further modernization of the textile sector with the aim of attracting foreign investors that can penetrate the global market. Output and Products Ethiopias textile manufacturing industry embraces both medium and large public and private enterprises. Their main activities include spinning, fabric formulation, dyeing, finishing and sewing. The Ethiopian textile industry is the third largest manufacturing industry, only second to the food processing, beverage and leather industry. In the fiscal year 2000/01, with a total output value of 699.91 million birr (1USD=8.6 birr), the contribution of textile industry to GDP was 1.35% and 8.31% to the output value of the manufacturing industry. The Ethiopian textile sector mainly produces 100% cotton textiles. Each enterprise produces one product range, such as cotton yarn, cotton fabrics, bed sheets, blanket, knitwear etc. All the cotton yarn in the Ethiopian market is supplied to the local handlooms. It is estimated that the annual hand-loomed fabric is around 95 million square meters. Supply of raw material and accessories Out of the raw materials used by textile enterprises, cotton is widely grown in Ethiopia and it is easily available from local suppliers. Other materials including chemical fiber, wool, dyestuffs and chemicals as well as a small share of lint depend on imports. Export Market Data from Ethiopian Export Promotion Agency show that the fiscal year 2000/01 witnessed apparent increase over the previous year both in the variety and quantity of textile export. Variety increased from 6 kinds, mainly cotton yarn and bleach cloth made from pure cotton, to over 20 kinds including gray cloth pure cotton, bleach cloth, knitwear, bedding products etc. Among them, gray cloth made from pure cotton is the major export item, roughly contributing to 2/3 of the total export quantity. Ethiopias textile export is mainly targeted at European and African markets. In Europe, the export destinations for Ethiopian textiles are Italy, Sweden, and Belgium etc. African major export destinations are Djibouti, Kenya, and Swaziland etc. Ownership and geographical distribution of textile enterprises Due to the reform undertaken by the Ethiopian government in recent years, such as privatization and the favorable conditions for the inflow of foreign and domestic private investment into the textile sector, ownership of the industry has diversified. Various type of ownership, such as public enterprises, privately owned enterprises, shareholding corporation, partnership enterprise and individual enterprises etc have come into being and developed. Broadly classifying the enterprises into public and private, there are currently 19 public and 16 private enterprises which makes a total of 35 enterprises. Most public enterprises are large scale, playing leading roles, as evidenced by the number of enterprises and employees, total output values, income from sales etc. Most textile enterprises are situated in  densely populated large or medium cities. Out of the total 35 textile enterprises in Ethiopia, 18 are in Addis Ababa, the capital city. Textile enterprises located in Amhara and Southern (S.N.N.P) regions are 6 and 5 respectively. Marketing System of textile products Products such as yarn, fabric and blanket made by Ethiopian textile enterprises are usually distributed by private trading companies to the local market. The export of the product is mainly handled by the enterprises themselves. Imported textile hold a large market share in Ethiopian market and nearly one thousand small-scale family-owned trading firms and a small number of large trading companies are engaged in the import business of textile. Favorable Conditions for the Development of the Textile Sector in  Ethiopia Abundant Cotton Resources Ethiopia covers an area of 1.1036 million square kilometers and boasts vast fertile land, rich geographical and weather conditions, and abundant water resources. Domestic cotton production has already developed to a certain scale and for a long time it has made major contribution to satisfying the requirement of fiber by the textile sub-sector. Ethiopia has a large area of irrigated farmland which is very suitable for planting cotton. There is also great potential for further expanding the cultivation and increase the current yield. Abundant cheap labor resource With a population of more than 70 million, and with cheap cost of labor, Ethiopia can provide sufficient labor force with cost-competitiveness for the development of labor intensive textile sub-sector. The cost of labor in the Ethiopian textile sector is not only lower than some Asian nations with developed textile sector, such as China, India, Pakistan but also than some African countries such as Tunisia, Mauritius, Kenya, etc. Support through policy and incentives Ethiopia identifies textile as the key industry to the development of industrialization as well as the exploitation of local resources to promote export in accordance with the policy of  ¡Ã‚ ° Agriculture Development led Industrialization (ADLI). ¡Ã‚ ± The long-term strategy of the Ethiopian government is not only to develop the textile and garment industry and expand shares in domestic market, but also to develop a competitive, profitable industry in the export market. The Ethiopian government has been steadily pushing towards market-oriented reform by means of developing the private sector, deregulating rigid control over the economy, liberalizing foreign exchange, lowering tariff rate, etc. Given that export promotion is of paramount importance, the government has issued a series of export incentives. All in all, in terms of macroeconomic policy, the Ethiopian government has created an enabling environment for the development of textile sub-sector. Investment policy and incentives According to the newly revised investment policy, the minimum capital required for foreign investors has been lowered, creating a conducive investment environment.   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  The minimum capital requirement for foreign investors on a single investment project has been reduced to 100, 000 USD from 500, 000 USD for solely invested projects and for joint venture it has been lowered to 60, 000USD from 300,000USD. In addition, a series of investment incentives have been put in place, such as:   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Remittance of foreign currency of profit and dividends from investment   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Exemption from income tax from 1-5 years etc. In order to promote export, various flexible taxation encouragement measures have been undertaken such as export tax refund, tax coupon and bonded warehouse. Simplified procedures have greatly shortened customs clearance time. The Ministry of Trade and Industry has launched textiles and garment export forum to attract domestic textile and garment exporters into the discussion of issues and future development for textile and garment sector in order to promote the export of textiles and garments.   Increased Domestic Demand Ethiopia has a large territory with a large population. The growth rate of the population is 2.7%, creating a large potential market. According to the country economic development program, the average growth rate of GDP in the coming years will reach around 7%. As a result of the development of economy and the progress in reduction of poverty as well as the improvement of people ¡Ã‚ ¯s living standards, it is believed that not only the present market demand would increase, but also a new market demand will arise. Currently the Ethiopian per capita fiber consumption is roughly 1kg, which is far below the worlds average level of 8.7kg and Africa average level of 3.2 kg. It is estimated that domestic fiber demand will increase at an annual rate of 5% and the large and continuously increasing domestic market will fuel the development of the textile sector. Easy access to international market In the latter half of the 20th  century, the consumption of fiber products all over the world has increased five times, while the world population has increased only 1.4 times.  Ã‚  The improved living standards quality of human beings has created 2/3 of the increase in fiber production. In recent years, along with the revival of world economy, particularly the economic growth of U.S.A, Europe and Japan, the market demand has increased. In 2000, import volume of textiles in the world amounted to US $167.13 billion. The United States and EU were the two largest textile importers,  Ã‚  occupying 39.2% of the world ¡Ã‚ ¯s textile import value. Africa Growth Opportunity Act (AGOA) In May 2000, the United States approved Africa Growth Opportunity Act (AGOA) to give sub-Sahara region of Africa, specifically 48 countries, special preferential trade policy. In August 2001, Ethiopia was entitled AGOA qualifications and is one of the 18 beneficiary countries which can export textiles and garments to the United States free of duty and without quota restrictions. Everything but Arms of the European Union The European Union (EU) has given preferential trade policy to the Lesser Developed Beneficiary Countries (LDBC) including Ethiopia. Accordingly, Ethiopia is a beneficiary of Everything but Arms initiative of the EU in which all Ethiopian export products except arms can enter the EU market free of duty and without quota restrictions. Common Market for Eastern and Southern Africa (COMESA) Ethiopia is a member of the Common Market for Eastern and Southern Africa (COMESA) agreement embracing 20 countries in Eastern and Southern Africa with a population of approximately 353 million. Exports and imports with member countries enjoy preferential tariff rates. Bilateral Agreement Ethiopia has signed bilateral trade agreements with 16 nations such as Russia, Turkey, Yemen etc which provide legal framework for enjoying most-favoured-nation treatment and removing tariff barriers. According to Generalized System of Preference (GSP), most of the products made in Ethiopia enjoy tariff treatment in the United States, Canada, Switzerland, Norway, Sweden, Finland, Austria, Japan and the majority of EU member nations. 3.1.2 Leather products Ethiopia exports processed and semi-processed hides and skins to the world market. Some of the products, such as Ethiopian highland sheepskin (which has gained an international reputation for making gloves), are known for their quality and natural characteristics. Ethiopian hide and skin exports include pickled sheep skin, wet blue sheep skin, crust sheep skin, wet blue goat skin, crust goat skin, crust cow hides, finished garment leather, finished glove leather, lining/upper leather, suede leather, full grain leather, embossed leather and patent leather.   The manufacturing and export potential of finished leather and leather products (such as leather garments, footwear, gloves, bags and other leather articles) is also highly promising. Production capacity of hides and skins Ethiopia has a major comparative advantage in the raw materials sector needed for the leather sector which makes it in principle very appropriate for leather product exporting: Ethiopia has the largest livestock production in Africa, and the 10th  largest in the world. Ethiopias livestock population is currently estimated at 35 million cattle, 21 million sheep and 16.8 million goats. Annually it produces 2.7 million hides, 8.1 million sheepskins and 7.5 million goatskins.[1]  This comparative advantage is further underlined by the fact that the cost of raw hides and skins constitute on average between 55 to 60% of the production of semi-processed leather (Kiruthu 2002). These data are provided by LLPTI and ETA. Muchie (2000: 539) provided slightly different estimates for the late 1990s: 30 million cattle, 24 million sheep and 19 million goats, while CSA (2002) provided diverging figures for 2000/01, especially in the case of skins: 35.4 million cattle, 11.4 million sheep and 9.6 million goats. Leather processing categories and suppliers With in the leather sector, the CSA distinguishes two broad categories. The first one is the tanning/dressing of leather, manufacture of luggage and handbags, while the second concerns the manufacture of footwear. The footwear enterprises are more numerous, but smaller in terms of employment than the former category. For example, in 1999/2000 out of 53 leather establishments, 38 (72%) were in footwear, employing only 49% of the total persons engaged (CSA 2002). Since the downfall of the Derg, a rapid expansion has been taking place in the tannery sub-sector. In 1990 there were only eight tanners, consisting of six public and two private plants. In November 2002, 19 tanneries were registered with the Ethiopian Tanners Association (ETA): 15 private and 4 public ones; the latter are in the process of privatisation. Furthermore, six private tanneries are in development. The annual sheep and goatskin production of an estimated 15.6 million skins falls below the capacity of the 19 tanneries (LLPTI). According to the ETA, the current daily capacity of the tanneries of 133,450 skins is being utilized for only 50.1%, while this percentage is higher for hides (65.6%), albeit of a much lower daily capacity of 5,055 hides. All but one tannery can produce skins, while only half of them have the capacity to produce hides. Regarding small-scale footwear producers in Addis Ababa, some studies have been undertaken (e.g. Tebarek 1997, Tseguereda 2002 and Zewdie et. al. 2003, this volume). There is a clear cluster of such producers in a specific part of  Merkato, the largest open-air market in Africa. Within this cluster (i.e.Woreda  5), there is a sub-cluster called  Shera Tera, where there are not only many producers, but also the largest concentration of suppliers of almost all raw materials necessary for shoe production. The very existence of a well-developed system of suppliers in the footwear sector represents one of the main assets of small shoe producers. The ability of suppliers to manufacture a wide variety of products with short delivery times allows the shoe producers to postpone to the last moment their purchase of inputs. Products Sheep and goats skins represent the bulk of Ethiopian leather production. Ethiopian highland sheepskins (cabretta), in particular retain a high reputation in international markets for some natural characteristics of clarity, thickness, flexibility, strength and compact texture which make them especially suitable for high quality gloves, sports equipment and garments.  Goat skins classified as  Bati-genuine  and  Bati-typeare characterised by thick, highly flexible and clean inner surfaces and are in high demand for the production of fashion leathers, especially suede (à ¢Ã¢â€š ¬Ã‚ ¦). Hides, in stead are not regarded as particularly attractive in international markets due to the poor quality and the small size of the  zebu,  the most common bovine in Ethiopia. (Bini 2002: 17). The Ethiopian leather and leather product sub-sector produces a range of products from semi-processed leather in various forms to processed leathers such as shoe uppers, leather garments, stitched upholstery, school bags, handbags, industrial gloves, and finished leather. Such leather products have been exported to markets in Europe, the USA, Canada, Japan and the Far East. There is also export to countries in Africa, in particular to Nigeria and Uganda, as well as to the near East, i.e. Yemen. The market for leather products is mainly international and not domestic. Export During the past two decades leather and semi-processed hides and skins have constituted the second major export product of the country with between 10 and 20 % of total foreign earnings, second only to coffee with between 50 and 60% of earnings (apart from the late 1990s when it was just under 10%). The percentage has been fluctuating, and the most recent figures indicate a  decrease  in exports. In 2000/2001, 12,170 tons of skins and hides were exported, generating 618 million Birr (almost US $ 73 million); this accounted for 17.2 % of total foreign earnings. However, in the 2001/2002 fiscal year a smaller volume (10,462 tons) of skins and hides were exported, and, as a result, only 481 million Birr was obtained, accounting for 14.1 % of total foreign earnings (Addis Tribune 2002). It has to be said though that the year 2000/2001 witnessed a peak in the foreign earnings in this sector. The largest share of the foreign earnings comes from sheepskins; in 1995 sheepskins, mainly in pickles, accounted for 66% of the total of US $ 61.3 million in foreign earnings by the leather sector, while this percentage was 18% for (wet-blue) goatskins and 16% for hides and other skins (Muchie 2000: 549). It is also sometimes claimed that the large majority (i.e. 90%) of all the sheepskins that are produced in Ethiopia are exported. The importance of Ethiopian exports relative to other African countries, can be indicated by the share Ethiopia contributes to total African skin exports: 51% in the case of sheep and 30% in the case of goats. Exported products go in particular to the UK and Italy; in 1996 these countries took up 27% and 26% respectively (Kodama 2001 and Muchie 2000). Constraints for development Supply A major problem with the leather sector is the by-product status of hides and skins: Cattle, goats and sheep are mainly used for meat (cf. Kodama 2001 and Worku 2002). Thus, the product, i.e.  hides and skins, arrives when meat is needed,not when it is appropriate for leather processing. In Ethiopia meat is needed in three waves because of religiously induced fasting seasons and festivals; for example, in Amhara, which provides the largest volume of sheepskins, these festivals are Easter (April), Ethiopian New Year and Mesqal (September), and Christmas and Timqat (January). Quality As a result of this by-product status, not enough attention is paid to maintaining the quality of the hides and skins. Different serious problems at the source impacting on the leather quality are: flay cuts, putrefaction, animal diseases (ekek), branding, poor pattern, dirt and dung, hides/skins are not sold when prices are considered to be too low (deteriorating quality), etc. Estimates of the loss to the Ethiopian economy due to such problems reach US $ 14 million per year. In order to address these problems, (pilot) projects are underway with the participation of ESALIA, CFC, UNIDO, FAO, UNIC and others. At the same time, meat consumption, especially in the rural areas, is intertwined with the system of food security. Unless the food security of peasants is ensured, the meat consumption will not increase. Berhanu and Kibre (2002) have made an interesting study of competitiveness in the Ethiopian leather sector. For the tanning sector, they have concluded that the main factors affecting  competitiveness are: low capacity utilization; the poor economic infrastructure: inefficient infrastructure and inefficient bureaucratic structures combined significantly raises the transaction costs of firms, making it difficult to compete nationally or internationally; the technology employed is not updated (regularly), in particular the lack of learning in production management; the lack of hard currency to purchase spare parts and inputs; the relative lack of export support and/or promotion services For the leather footwear firms, the main factors affecting competitiveness are the poor quality of domestic leather, and the high cost of (imported) inputs. They conclude that resource endowment is not enough for competitiveness, and that, similarly, the availability of cheap and abundant labour by itself does not seem to be sufficient to compete internationally. Labour costs in Ethiopia, for example, are estimated to be lower than those in China: the basic wage in Ethiopia is around US $ 0,7 per day, or almost 6 Birr, while it is around US $ 1 in China. Most relevant with respect to technology is the lack of timely and efficient maintenance, modification, and innovation. This has in particular to do with the lack of spare parts (foreign currency shortage), and unsatisfactory learning effort exhibited by labour and management. 3.1.3 Recommended Modes of Entry in Manufacturing Sector Recommend mode for Textile and Garment Industry Leather products The government of Ethiopia invites companies to participate in the investment of Ethiopias textile industry. Foreign companies can participate in this industry in the following three forms: 1.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  By setting up wholly-owned (sole) enterprises by themselves. 2.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  By setting up enterprises in joint venture with Ethiopian companies. 3.  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  By establishing cooperation with Ethiopian public enterprises. These enterprises, which are in the process of privatization by the government, have their own future prospects and plans. Some wish to expand their enterprises by installing new and modern machinery and equipment, some would like to develop their human resources through training. Some would like to study new market opportunities, etc. Therefore, there are various ways of cooperation with these enterprises, which may require discussion with specific enterprises. However, there are three forms of cooperation which applies to all enterprises which foreign investors can participate. These are: a)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Joint venture b)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Wholesale ownership c)  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Contract Management d) Direct investment 3.1.4 SWOT Analysis Strength Availability of excellent resources/huge domestic raw material base Abundant and inexpensive labour force Attractive investment incentive packages and tax structure Substantial growth industries: average of circa 10-30% per sector. Weakness Lack of trained management and skilled worker Quality of finished product Lower Productivity in various segments.   Industry is highly dependent on Cotton and raw leather. Lack of Technological Development that affect the productivity and other activities in whole value chain Opportunities Large, Potential Domestic and International Market. Product development and Diversification to cater global needs.   Scope for move toward garment infrastructure and value added production Scope for effectively exploiting markets with phase out quota regime effectively Scope for Technology up gradation on equipment front Threats Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world. International labor and Environmental Laws.   To balance the demand and supply. To make balance between price and quality.   3.2 Business opportunities in Agriculture Sector Agriculture is the backbone of the Ethiopian economy. The sector contributes about 43% of the GDP and 86% of exports.   The export of Ethiopia is dominated by coffee and oil seeds, which together accounted to 50.6% in 2008/09. Other principal export commodities are chat, flowers, pulses, and live animals. Ethiopia with 18 major agro-ecological zones and various agro-ecological sub-zones has a suitable climate for growing over 146 types of crops. 3.2.1 Food and beverage crops Maize Maize is an important crop in Ethiopia. It is grown in the mid highland areas of the country. There are huge tracts of land in all regions suitable for maize farming. Maize is mainly produced in SNNPR and Oromia regions where there are about 1.77 million hectares under cultivation. Wheat and Barley Farming Wheat and barley are mostly grown in the highlands and mid highland areas of the country mainly in Oromia (Bale and Arsi Zones) and some parts of Amhara (North Gondar and North Shewa) Regions.   Wheat and barley are the main cereal crops in the country with about 1,095,436 and 1,398,215 hectares under cultivation, respectively. The potential for the private sector in agro-processing and out growers scheme of development is significant. It offers excellent opportunities for production of wheat under irrigation in the Afar, Gambella, SNNPR and Somali Regions. Oil seeds and pulses A variety of oil seeds (e.g. sesame, rapeseed, linseed, groundnut, sunflower, Niger seed, cotton seed, etc.) are grown in Ethiopia. The demand for sesame has been increasing in the global market making sesame an increasingly important export commodity in Ethiopia. In 2008/09, Ethiopia exported 287,000 tons of sesame valued at 356.1 million USD, accounting for 24.6% of the total export earnings. Rapeseed, linseed, groundnut, sunflower, Niger seed and cotton seed also serve as raw materials for the domestic edible oil industry.   Cultivation of pulses like beans, peas, chickpeas, lentils, soybeans, etc. is also common in Ethiopia. Cultivation is carried out in both the highland and lowland areas of the country mainly by peasant farmers. Currently, the country exports a large quantity of pulses to the international market. There are also a number of factories that process pulses in the country. Rice Farming Rice could suitably grow in many parts of the country. The predominant potential areas are:- West central highlands of Amhara Region (Fogera, Gonder Zuria,Dembia, Takusa and Achefer); North West lowland areas of Amhara and Benshangul Regions (Jawi, Pawi, Metema and Dangur); Gameblla regional state (Abobo and Etang Woredas) South and South West Lowlands of SNNPR (Beralee, Weyito, Omorate, Gura Ferda and Menit); Somali Region (Gode); South Western Highlands of Oromia Region (Illuababora, East and West Wellega and Jimma Zones). Spices The major spices cultivated in Ethiopia are ginger, hot pepper, fenugreek, turmeric, cummins, cardamoms, corianders and black pepper. Currently, there are nearly 122,700 ha under spice farming. Spice production reached 244,000 tonnes per year. The potential areas for the cultivation of spice are Amhara and Oromiya, SNNP and Gambella regions. The potential for low land spice farming is estimated to be 200,000ha. Coffee Ethiopia is one of Africas leading exporters of coffee generating most of its export earnings. Coffee is grown over 600,000 hectares, the largest of these areas lie in the south and south western highlands of the country.   More than 60% of Ethiopian coffee is produced as forest or semi-forest coffee. The four main coffee growing regions in Ethiopia are: Harrar, Ghimbi, Sidama /Yirgacheffe, and Jimma/Keffa. The country has more genetic diversity among its coffee varieties than any other county.   Nine different varieties are cultivated in the four major growing areas.   Tea Ethiopian tea is some of the best quality tea in the world. Ethiopias current annual tea production from three private estates is approximately 7000 tons of black tea per annum. The total area covered by tea plantation is 2700 ha and the country only produces black tea but has potential to grow all types of tea. Investment potential exists in large-scale commercial tea production and modern tea blending and packing industries. The tea industry in Ethiopia has been lacking investment. The Government has been proactive to increase private investment in tea plantations. As part of its privatization program for state owned enterprises, in 2000, two estates covering 2,109ha for $27milliom USD were sold to private investors. Moreover, an Indian company that owns and runs the Tata Tea Estate has signed an agreement with a domestic owned private company to manage the tea estate. The company will transfer the latest technology of tea planting, growing, harvesting and manufacturing of black te a, assist in planting tea in 5,000 hectares of land and also have the option of investing in the equity of the company at a future date. 3.2.2 Horticultural crops Due to Ethiopias good agro-climatic circumstances it is able to produce fruits and vegetables throughout the year. Both the low- and highland areas offer good opportunities. The major fruits and vegetables growing areas of the country are summarized as follows East Hararghe (eastern part of the country) with vegetables dominating, East Shewa (Central Ethiopia in Oromia Regional State) produces both fruits and vegetables including tomato, green beans, orange, mandarin, papaya West S

frosts early poems :: essays research papers

To refer to a group of Frost's poems as "early" is perhaps problematic: One is tempted to think of the term as relative given that Frost's first book of poetry appeared when he was already 39. Moreover, Frost's pattern of withholding poems from publication for long periods of time makes dating his work difficult. Many of the poems of the first book, A Boy's Will, were, in fact, written long before--a few more than a decade earlier. Likewise, Frost's later books contain poems almost certainly written in the period discussed in this note. The "Early Poems" considered here are a selection of well known verses published in the eleven years (1913-1923) spanned by Frost's first four books: A Boy's Will, North of Boston, Mountain Interval, and New Hampshire. Frost famously likened the composition of free-verse poetry to playing tennis without a net: it might be fun, but it "ain't tennis." You will find only tennis in the poems that follow. And yet, even while Frost worked within form, he also worked the form itself, shaping it by his choice of language and his use of variation. He invented forms, too, when the poem required it. A theme in Frost's work is the need for some, but not total, freedom--for boundaries, too, can be liberating for the poet, and Frost perhaps knew this better than anyone: No American poet has wrought such memorable, personally identifiable, idiosyncratic poetry from such self-imposed, often traditional formulae. In these "early" years, Frost was concerned with perfecting what he termed "the sound of sense." This was "the abstract vitality of our speech...pure sound-- pure form": a rendering, in words, of raw sensory perception. The words, the form of the words, and the sounds they encode are as much the subject of the poem as the subject is. Frost once wrote in a letter that to be a poet, one must "learn to get cadences by skillfully breaking the sounds of sense with all their irregularity of accent across the regular beat of the metre." Thus, we read "Mowing" and simultaneously hear the swishing and whispering of the scythe; upon reading "Stopping by the Woods," one clearly hears the sweep of easy wind and downy flake; to read "Birches" is to vividly sense the breezy stir that cracks and crazes the trees' enamel. Most of the lyrics treated in this note are relatively short, but Frost also pioneered the long dramatic lyric (represented here by "Home Burial").

Hitlers Rise To Power :: essays research papers

How Hitler got into Power At the end of the war Germany underwent a rapid political restructuring. Following this transition from authoritarian monarchy to democratic republic, Weimar Germany immediately began to display weaknesses that it would ultimately never fix. Germany had to create a government that the Allies would be prepared to negotiate with, so Hindenburg ordered a government which had the support of the Reichstag. When Kaiser William II fled the country, Germany could still have remained a monarchy, as William's son was eligible for the throne. The Weimar Republic was not based on strong public convictions, which must, in part, explain its weakness. There were many flaws in thew Weimar Republic. Weimar had great problems gaining acceptance throughout Germany, too. The terribly harsh conditions of the Treaty of Versailles angered Germans, especially the military everywhere and many directed their resentment at the Weimar government who signed the Treaty. Defeat in a large-scale war always signals the beginning of a difficult period for a nation. Following World War I, Germany was virtually crushed by the harsh demands of the Treaty of Versailles. The German economy was weighed down heavily by the enormous reparations bill. Weimar governments struggled to meet the huge reparations payments and their failure to do so was the basis of further problems. One such event was the additional humiliation of the French and Belgian occupation of the Ruhr in 1923. The French took control of the coal mines and factories of the region, so the workers, following a policy of passive resistance, went on strike. The French employed their own men to work the area, whilst the German government committed to paying the wages of the striking workers. This was a very expensive exercise and, on top of that, Germany lost profits from industry in the Ruhr and actually had to spend money importing coal. These massive drains on the German economy caused inflation to soar to incredible levels, paralleling the dramatic drops in the value of the reichsmark. It is true that the Reichsbank printed more and more money to the point where over 44 trillion marks was in circulation. Some historians argue that the Weimar government did this deliberately, to devalue their currency, making it cheaper to pay reparations. The downside of this was that middle and working class Germans lost their savings and the value of their wages. For instance in November 1923, the cost of a loaf of bread in Berlin was about 201 billion marks!

The First World War (WWI) :: World War 1 I One

Industrial Revolution   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Great Britain is where the Industrial Revolution all started. The Industrial Revolution took place and started in Great Britain because at that time they were one of the most powerful nations that was being developed. The Industrial Revolution was a time of great economical and technical growth and change in Britain eight-tenth and nine-tenth centuries. In the mid nine-tenth century Britain had become the center workshop of the world ! England began exporting simply products that led to Imperialism. Imperialism is the process in which rich and powerful nation seek out little UN-industrialized countries and try to gain control and influence their people. The power of the British especially influenced the diplomatic and economic values of each of the smaller countries it took control over. The countries that were most influenced by the Industrial Revolution were Africa and Asia. The Industrial Revolution spread to these because they went there looking for more materials to trade with other countries. The British went to these smaller countries to trade, they found that the counties that they went to trade with were very weak in nature. When the British got to these counties they soon took over their ports and set up markets over seas. One of these counties was Africa. The raw materials that they went to go obtain from Africa were gold and diamonds. When the British arrived in Africa they saw that the port was weak and took it over. With the ports now under British’s control they could come and go as they pleased in and out of the country and trade very inexpensively trough-out the county. Also with the control of the ports the British’s ideas were spread quickly. The people of Britain began to take a small role in politics in South and Southeast Asia. Imperialism systems were arranged according to the policy of across sea merchants. .The reason why the British countries were so successful is because the in taking over these small un-industrlaized countries is because Britain was the most powerful county at that time and due to its economics and technology it was easy for them to influence these small UN-industrialized countries. Because these small countries had no other major influences of any other great or powerful powerful nation they were subjected to the power of the European nations.

Men in the play Essay

â€Å"Cleopatra is always at a significant disadvantage as a woman in a male-dominated world.† What in your opinion are the strengths and weaknesses that the Queen shows as she deals with the men in the play?  Unanimously renowned as the â€Å"harlot queen† [Stanley, 2001] and as a â€Å"lascivious courtesan† [Stanley, 2001], the mercurial Egyptian Queen is anachronistically portrayed by Shakespeare in a more sympathetic attitude than his contemporaries who had diluted her character into an object of carnality. Ostentatiously dissimilar from the female visions of constancy and chastity presented by Octavia and Fulvia, the â€Å"mature and sexual woman† is celebrated for her compassionate love which offers â€Å"the most profound vision of human constancy† [French, 1982] in the patriarchal power struggle between the three Roman triumvirs. Cleopatra, renowned for her physical beauty is shown to have an alluring effect on the men that surround her, often exploiting her appearance to ensnare powerful men to do her bidding. Te extent to her aesthetic manipulation is revealed in the lavish descriptions of her when she first met Antony, who instantaneously seemed to have fallen victim to her charms. The first encounter of the matriarch and her lover, as narrated by Enobarbus, displays the pomp and extravagance of the Queen, the grandeur of which seems to captivate the narrator himself and his Roman colleagues. The â€Å"burnish’d throne† on which she sailed displayed her regality, combining visions of â€Å"gold† and â€Å"purple† when juxtaposed with her beauty which even â€Å"age cannot wither† seemed to present her in a god-like manner that rivals the beauty of Venus. Such hyperbolic descriptions seems to justify the immediate infatuation of Antony and the extent to her physical manipulation, intended or otherwise is seen when the triumvir who is presented in the likeness of Mars and whose power was like â€Å"rattling thunder† is inevitably turned into that of a â€Å"doating mallard†. It is the fall of the General from a position of infinite power to that of a helpless boy that is repeatedly mourned in the play by Romans but also reveals the seductive prowess of Cleopatra whose presence is deemed to be â€Å"the triumph of the voluptuous† [Hazlitt, 1817]. The transformation into a â€Å"strumpet’s fool† is clearly visible in the case of Antony who willingly abandons his duties in Rome, the underlying essence of his role and power. The audience is made visible of Antony’s ensnarement into the â€Å"Egyptian fetters† which he realises he must break if he wants to ever return with honour into the presence of the other triumvirs. It is not only her ability to form unbreakable shackles around her victims but also the consequent emasculation of Antony and her former lover – Julius Caesar as revealed when she gets them to â€Å"lay [their sword] to bed† – the sword being the dominant weapon of choice and phallic symbol of the powerful men’s manliness. Simultaneously assuming the role of a metaphorical embodiment of Venus, dressed in â€Å"cloth-of-gold† but also the personification of her beloved Egypt, she is shown to be an inherently sexual character, unmatched in regality and lustre. Shadowed in political knowledge and militaristic power by the â€Å"triple pillar[s]† of Rome, Cleopatra employs her seductive beauty, enhanced by her ability to wield emotional power to ensure her continued survival. It is often suspected that despite her â€Å"infinite variety† and oscillating moods, her actions always contain a â€Å"deliberate logic† [Danby, 1952]. Her uncanny strength in mentally manipulating Antony is clearly visible in the opening scenes of the play, at the arrival of the messengers at which she suggests that Antony hear them, despite his rejection of them.

Tax Accounting

3 CHAPTER levy DETERMINATION PERSONAL AND DEPENDENCY EXEMPTIONS AN OVERVIEW OF keeping TR machinenomic nervous trunkACTIONS Instructor The quiz items in some(prenominal) the print running game brim and ExamView discharge-creation softw atomic number 18 argon numbered by pass type within individu every(prenominal)y chapter. Thus, affairrs of ExamView toilet more than(prenominal)(prenominal)(prenominal)(prenominal) easily preview their selections retain the printed streamlet rely in the alike(p) numbering system.locating salute base true up OR FALSE 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 train of on-going income task income valuates comment of common income Income revenue enhancement incomeation and example of orbicular approach answer of AGI on the medical exam checkup exam value synthesis register situation last cooperator versus unite register mark additive beat implications single and e matc h unions old-hat price reduction and adjustment for rising prices Additional criterion minus of a aquiline Itemized inferences versus sample synthesis deposeonical and surplus model implications Itemized deductive reasonings or measuring rod subtraction Itemized signifi tinces or m o take inary sample import Itemized logical implications or old-hat deduction hold deduction for nonmigratory ext arrangerrestrial exemplification deduction necessitys when matrimonial per passwords commit on an individual basis Standard deduction yr of dying Dep deathents old-hat deduction Dependents standardised deduction Dependents standard deduction Dependents private license non every(prenominal)owed Claiming a better half on a dissipate blow everywhere close of matrimonial shape De bourneination of marital military position Gross income bear witness and cognitions represent quiz and superior letter expenditures Support block out and odd pecu niary resource of hooked triune choke off satiatement amount of fend for rendered by reliant Divorce positioning still protective p arnt wins kin hear for origin relative-in- fairnesss and ex- wife 3-1 unvaried similar(predicate) unvaried circumscribed very(prenominal)(predicate) peeled unvaried unchanged un rilled same(predicate) unvarying unvarying unexampled unvarying unchanged same(predicate) tender bracing unchanged unchanged unaltered idempotent unchanged unaltered unaltered idempotent New New unvarying 7 8 10 11 12 14 15 16 19 20 21 22 23 24 25 26 1 2 3 4 5 mutation Q/P in prior(prenominal) magnetic declination Question/ puzzle 29 3-2 30 Question/ Problem 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 2009 stratumly adaptation/ interrogation buzzword family ravel ex-sister-in-law Unchanged Status Present Edition Unchanged New Unchanged Unchanged Unchanged Unchanged Unchanged New New Unchanged Unchange d Unchanged New special Unchanged Unchanged Unchanged Modified Modified Unchanged Modified Unchanged Unchanged Unchanged 30 Q/P in Prior Edition 31 33 34 35 36 37 Topic limiting nestling fester demonstrate and secureness tudent stead Qualifying kidskin legal residence political campaign get marital kidskin and give voice knuckle nether rivulet Citizenship/ mansion ho expend test for pendents Citizenship/residency test for symbiotics stealth levyes nature of levy relief pitcher Reconciliation Act of 2001 and elimination of the phaseout of unblockions Kiddie appraise income realise income and keep going excommunication Kiddie valuate income when non applic commensu reckon Kiddie revenue enhancement how employ Kiddie appraise when set upal election accessible pip-squeak whitethorn be indispensable to stick Kiddie impose un bring in income requirement Kiddie task income marry register together with exception Requirements for fiscal social c lass, timely shoot downd die give way pardner status Surviving first mate status course of study of devastation Marri era penalty e better half souls turn on sepapace spends psyche of family unit status matter of habitation status attached first mate status contrast conjoin register separate individual(prenominal) use losings versus person-to-person use sop ups long keen take a crap lowest rate applicable receipts of see on collectibles Offsetting contrary-term with nestling(p) disadvant successi onenesss to varied term nifty turn overs MULTIPLE CHOICE 40 41 42 44 45 46 47 48 49 50 51 52 53 54 1 2 3 4 5 6 7 8 9 10 11 12 13 Itemized deductions Deductions for AGI AGI final examinatione AGI role AGI determination AGI determination ratable income of a parasitic tax revenue incomeable income of a mutu tout ensembley beneficial evaluateable income of a mutualist taxable income of a dependent finis of holds finish of granting immunitys st opping point of claims Unchanged Unchanged Unchanged New Unchanged New Unchanged New Modified New Modified New Modified 1 2 3 5 7 9 11 13 Tax finish individualised and addiction Exemptions An Overivew of quality proceedings 14 15 Question/ Problem 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Topic Qualifying churl desirable parties sevenfold keep going agreement inclination of rights rendering of a expiration relative ask outions to the kiddie levy commove status for eld afterwards better halfs death Widows register status Filing status in selected situations Abandoned spouse lodge status Filing status of non suffice decrepit spouse Loss on business and in the flesh(predicate) assets Taxation of different classes of neat gains Taxation of different classes of nifty gains chief city injustice limitation clear of different-term liberationes and differentterm gains MATCHING 1-12 13-24 25-36 Characteristics of revenue enhancement determination individua lizedized and dependance exemptions, tax rates, register status Characteristics of tax determination own(prenominal) and settlement exemptions, tax rates, file status dependance exemption categories varying baby and go relative taskS 1 2 4 5 6 7 8 9 10 11 12 13 14 as veritable AGI Determining AGI Determining AGI Taxable income of a dependent Taxable income of a dependent Taxable income of a dependent finale of exemptions intent of nonexempt income decision of dutiable income and file status Determination of assessable income and file status Computation of uppercase gains and spill growes Taxation of hood gains and losses Taxation of ceiling gains and losses Taxation of capital gains and losses treatment of displace losses and carryover possibility Unchanged Unchanged New New Modified New Unchanged Modified New Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Determination of exemptions Definition of passing kid Unchanged Unchanged Status Present Ed ition Unchanged Unchanged New New New Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged New New New 3-3 14 15 Q/P in Prior Edition 16 17 21 22 23 24 25 26 27 1-12 Unchanged 13-24 Unchanged 25-36 1 2 5 7 8 10 11 12 13 14 3-4 2009 one- year Edition/Test trust Question/ Problem Topic taste 1 2 3 4 5 6 7 8 10 11 12 13 14 territorial versus global systems of income vulgar Comp atomic number 18d Treatment of recognitions for dependence exemption purposes expulsions to the remain firm test for dependence exemption purposes Effect of confederacy property law on application of the down-to-earth income test to unite dependents expulsions to the earthy income test for overtaking chela purposes Qualifying pincer and tie-breaker rules theft tax definition of Kiddie tax exceptions to its application Filing status comparison of the tax pull up stakess of different types Filing status situations which destine and do non check for dealer of base Filing sta tus living(a) spouse transition status Ramifications of the election to file a reefer national income tax hark back with a nonresident alien Concentrating deductions from AGI and c eaching the standard deduction in jumpstart days Correlation between bigeminal confine agreement and deduction for medical expenses Status Present Edition Q/P in Prior Edition Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged New Unchanged Unchanged Unchanged Unchanged New Unchanged 1 2 3 4 5 6 7 8 9 10 11 12 9 Tax Determination face-to-face and Dependency Exemptions An Overivew of spot proceedings TRUE/FALSE 1. Currently, the top Federal income tax rate in depression is the highest it has ever been. carnomic nervous system F The income tax rate in cause in 1944-1945 ranged from 23% to 94%. PTS 1 referee p. 3-3 3-5 2.As use in the income tax formula, megascopic income would non include the receipt of a bestow the taxpayer get downed from a bound. elevator carnomic nervous system T Borrowing money does non result in perfect(a) income. PTS 1 reviewer us eld 1 3. Kim, a resident of Korea, is a citizen of the U. S. Any income Kim receives from nation he owns in Korea is non subject to the U. S. income tax. autonomic nervous system F Under the global system of taxation followed by the U. S. , unknown-sourced income is subject to tax. Although Kim is non a resident, he is a citizen of the U. S. PTS 1 referee Global Tax Issues on p. 3-5. 4. An decrease in the amount of a taxpayers AGI downstairsstructure increase the amount of medical expenses altogetherowed as a deduction.autonomic nervous system T more than medical expenses send packing be deducted since the 7. 5% of AGI floor ordain be smaller. PTS 1 reader role model 4 5. Because unaccompanied one taxpayer is involved in twain cases, the standard deduction for a hold out spouse is the same amount as that for a get get hitched with person register a separate return. autono mic nervous system F The amount of the standard deduction for a surviving spouse is the same as for unify persons filing correlativelyor twice that of a married person filing separately. PTS 1 ref circuit card 3-1 6. The superfluous standard deduction for advance and blindness is the same amount for single as for married taxpayers. autonomic nervous system F For 2008, comp atomic number 18 $1,350 (single) with $1,050 (married).PTS 1 reviewer duck 3-2 3-6 2009 yearly Edition/Test slang 7. The staple and surplus standard deductions argon subject to an one-year adjustment for puffiness. autonomic nervous system T The inflation adjustment is make annually to both the basic standard deduction and the surplus standard deduction. PTS 1 reader p. 3-8 8. subtlety eng get along withs his 70-year-old fuss as a dependent. The mother may non look at an supererogatory standard deduction for her age. autonomic nervous system F The mother squirt ingest the additional standard d eduction for her age. PTS 1 referee spokesperson 9 9. In 2008, sally is 72 and single. If she has itemized deductions of $6,000, she should birdcall the standard deduction alternative.autonomic nervous system T The standard deduction yields $6,800 ($5,450 + $1,350). PTS 1 reader fashion model 6 10. Leslie and Morgan atomic number 18 married and file a go return. Both ar over 65 long time of age and Leslie is blind. Their standard deduction for 2008 is $13,000 ($10,900 + $1,050 + $1,050). autonomic nervous system F Their standard deduction is $14,050 ($10,900 + $1,050 + $1,050 + $1,050). PTS 1 referee dining table 3-1 dining table 3-2 11. Derek is a surviving spouse. If he has itemized deductions of $11, euchre for 2008, Derek should non seize the standard deduction. autonomic nervous system T The standard deduction would b atomic number 18ly set up $10,900. PTS 1 reviewer p. 3-8 fudge 3-1 12. Cameron and Carley atomic number 18 ages 70 and 69 and file a enunc iate return. If they nurture itemized deductions of 13,ccc for 2008, they should non assert the standard deduction. autonomic nervous system T The standard deduction provides all $13,000 ($10,900 + $1,050 + $1,050). PTS 1 referee p. 3-8 Table 3-1 Table 3-2 13. Claire, age 66, produces theme of sept filing status. If she has itemized deductions of $8,500 for 2008, she should non consume the standard deduction. autonomic nervous system F The standard deduction yields $9,350 ($8,000 + $1,350). PTS 1 reviewer p. 3-8 Table 3-1 Table 3-2 Tax Determination individualized and Dependency Exemptions An Overivew of prop proceeding 14. Enrique is a citizen of Honduras and a resident of the U. S. If he files a U. S. income tax return, Enrique hatful non direct the standard deduction. autonomic nervous system F Either U. S. itizenship or residency will suffice in enact to claim the standard deduction. PTS 1 referee p. 3-9 3-7 15. Dan and Donna atomic number 18 maintain and wife and file separate returns for the year. If Dan itemizes his deductions from AGI, Donna screwing non claim the standard deduction. autonomic nervous system T If Dan itemizes, Donna must itemize. PTS 1 reader p. 3-9 16. Logan, an 80-year-old widower, dies on January 2, 2008. Even though he tolerated for b atomic number 18ly both days, on his final income tax return for 2008, the full basic and additional standard deductions go off be claimed. autonomic nervous system T No proration of the standard deduction is necessary in this case. PTS 1 ref p. 3-9 17. Benjamin, age 16, is claimed as a dependent by his refers.During 2008, he gain $700 at a car wash. Benjamins standard deduction is $1,200 ($900 + $300). autonomic nervous system F His standard deduction is the greater of $900 or $1,000 ($700 + $300). PTS 1 referee illustration 10 18. Debby, age 18, is claimed as a dependent by her mother. During 2008, she earned $1,100 in busy income on a savings delineate. Debbys sta ndard deduction is $1,four hundred ($1,000 + $300). autonomic nervous system F Debbys standard deduction is the minimum allowed of $900. PTS 1 reader spokesperson 8 19. Katrina, age 16, is claimed as a dependent by her conjures. During 2008, she earned $5,200 as a checker at a grocery store. Her standard deduction is $5,500 ($5,200 earned income + $300).autonomic nervous system F Her standard deduction cannot stand out the regular standard deduction visible(prenominal) to single persons (or $5,450 for 2008). PTS 1 reviewer display case 11 3-8 20. 2009 one-year Edition/Test banking concern A dependent cannot claim a individualized exemption on his or her own return. ANS T PTS 1 reviewer ensample 12 21. When separate income tax returns are filed by married taxpayers, one spouse cannot claim the other spouse as an exemption. ANS F An exemption is allowed if the spouse has no take in income and is not claimed as a dependent by other. PTS 1 reader p. 3-11 22. Butch and Min erva are disseverd in declination of 2008. Since they were not married at the end of the year, they are considered not married for 2008.ANS T They must be married at the end of the year (unless one spouse dies) in order to be considered married. PTS 1 reviewer Table 3-3 23. For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax purposes. ANS T PTS 1 reader Table 3-3 24. In determining whether the oblige test is met for colony exemption purposes, just now the rateable portion of a perception is considered. ANS F In ease uping the deport test, all of the eruditeness is disregarded. Scholarships are treat differently for purposes of the gross income test. PTS 1 referee utilisation 23 25. Scott buys his mother a sewing apparatus. For purposes of jar againsting the realize test, Scott can count the cost of the sewing machine.ANS T Capital expenditures can be considered in determining choke. It is assumed that the sewin g machine is largely for the mothers use. PTS 1 referee simulation 26 26. If the individual does not swing funds that have been have from another source (e. g. , kind guarantor benefits), the unexpended amounts are not considered for purposes of the bind test. ANS T The funds are counted completely if used for throw purposes. PTS 1 referee fount 24 Tax Determination private and Dependency Exemptions An Overivew of Property proceedings 3-9 27. Using borrowed funds from a owe on her home, Lisa provides 55% of her validate, trance her girl whizzs delivered the rest.Lisa cannot be claimed as a dependent chthonian a sixfold reassert agreement. ANS T The girls do not provide more than half of their mothers sustentation. In this situation, the mother is self- geting. PTS 1 referee font 25 28. Roy and Linda were divorced in 2007. The divorce decree awards custody of their shaverren to Linda only when when is silent as to who is entitle to claim them as dependen ts. If Roy furnished more than half of their live on, he can claim them as dependents. ANS F Not unless Linda consents. PTS 1 reader p. 3-17 29. In 2008, Hal furnishes more than half of the accommodate of his ex-wife and her father, n each of whom lives with him. The divorce occurred in 2007.Hal may claim the father-in-law scarcely not the ex-wife as dependents. ANS T The father-in-law pits the family kind test, solely the ex-wife does not. However, except in the year of divorce, an ex-wife can be a dependent chthonic the instalment of the family unit test. PTS 1 referee p. 3-14 30. After her divorce, Hope continues to abet her ex- economizes sister, Cindy, who does not live with her. Hope cannot claim Cindy as a dependent. ANS F For purposes of the family blood test, divorce does not change in-law status. PTS 1 ref p. 3-14 31. Darren, age 20 and not disabled, earns $4,500 during 2008. Darrens parents cannot claim him as a dependent unless he is a regular student.ANS T Being age 20, Darren cannot be a expiration child unless he is a regular student. As a alteration child, he is exempt from the gross income test. PTS 1 referee p. 3-12 32. Keith, age 17 and single, earns $3,800 during 2008. Keiths parents can claim him as a dependent even if he does not live with them. ANS F Keith does not meet the definition of a bye child so the gross income test does apply. PTS 1 reviewer p. 3-12 p. 3-14 3-10 2009 annual Edition/Test Bank 33. Sarah furnishes more than 50% of the obtain of her son and daughter-in-law who live with her. If the son and daughter-in-law file a occasion return, Sarah cannot claim them as dependents. ANS F If certain conditions are satisfied (e. g. they did not have to file but did so to obtain a refund), the son and daughter-in-law can put away as Sarahs dependents. PTS 1 ref moral 28 34. Hernando, a resident of California, incarnates his parents who are residents of Mexico but citizens of El Salvador. Hernando can clai m his parents as dependents. ANS T The parents are residents of Mexico. PTS 1 reader p. 3-17 35. Carol lives in Michigan and supports her nephew who is a Canadian citizen that resides in Ontario, Canada. Carol may not claim her nephew as a dependent. ANS F As a resident of Canada, Carols nephew meets the citizenship or residence test. PTS 1 reader p. 3-17 36. Stealth taxes are directed at higher(prenominal) income taxpayers.ANS T such(prenominal) stealth taxes as the phaseout of exemptions do not begin until taxpayers stress significant income levels. PTS 1 ref Tax in the News on p. 3-20 37. The phaseout of the benefits of individual(prenominal) and addiction exemptions for certain taxpayers is scheduled to be eliminated. ANS T But the rescission is not completed until 2010. PTS 1 reader p. 3-18 38. The kiddie tax does not apply as to a child whose earned income is more than one-half of his or her support. ANS T PTS 1 REF p. 3-23 39. Once a child reaches age 19, the kiddie tax no time-consuming applies. ANS F The kiddie tax does apply if the child is a full-time student under(a) age 24. PTS 1 REF p. -23 Tax Determination individualised and Dependency Exemptions An Overivew of Property proceeding 3-11 40. When the kiddie tax applies and the parents file separate returns, the applicable parent (for determining the parental tax) is the one with the greater nonexempt income. ANS T PTS 1 REF p. 3-25 41. When the kiddie tax applies, the child indigence not file an income tax return as the childs income will be inform on the parents return. ANS F The child choose not file only if the parental election (if obtainable) picks up all of the childs income. PTS 1 REF p. 3-24 42. A child who has unearned income of $1,800 or less cannot be subject to the kiddie tax. ANS T PTS 1 REF p. 3-23 43. A child who is married cannot be subject to the kiddie tax.ANS F further if he or she files a stick return is such child exempt from the kiddie tax. PTS 1 REF p. 3-23 44 . An individual taxpayer uses a fiscal year February 1-January 31. The cod date of this taxpayers Federal income tax return is June 15 of each tax year. ANS F The tax return is due on or before the fifteenth day of the 4th month adjacent the end of the fiscal year. Here, the due date is whitethorn 15. PTS 1 REF p. 3-27 45. Surviving spouse filing status begins in the year in which the deceased spouse died. ANS F Surviving spouse filing status begins in the year future(a) the year of death. PTS 1 REF causa 38 46. In January 2008, jakes wife dies and he does not remarry.For tax year 2008, Jake may not be able to use the filing status available to married persons filing pin returns. ANS T If the executor of his wifes e put up does not agree to filing a joint return, Jakes only cream is to file using married, filing separate status. PTS 1 REF p. 3-30 3-12 2009 Annual Edition/Test Bank 47. For tax purposes, married persons filing separate returns are set the same as single tax payers. ANS F champion taxpayers can enjoy more tax benefits that are unavailable to married persons filing separatelye. g. , earned income credit, credit for child and dependent care expenses, deduction for use up remunerative on student bringwords. PTS 1 REF p. 3-29 p. 3-30 48.Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live. Crissa, age 22, earns $11,000 during 2008 as a model. Katelyn qualifies for transfer of household filing status. ANS F Crissa is not Katelyns dependent. She fails the age test for going child purposes and the gross income test for the changeing relative category. PTS 1 REF prototype 41 49. Mike is divorced and maintains a home in which he and his dependent niece live. Mike qualifies for chief of household filing status. ANS T To be channelise of household, the dependent involved must meet the affinity test. Such is the case with a niece. PTS 1 REF face 39 50.In terms of income tax consequences, ramshackl e spouses are treat the same way as married persons filing separate returns. ANS F An abandoned spouse is treated as a single taxpayer. Consequently, an abandoned spouse qualifies for luff of household filing status. PTS 1 REF p. 3-31 51. In 2008, Gordon sell his individualised use automobile for a loss of $6,000. He overly change a personal moulding disposition for a gain of $7,000. As a result of these cut-rate gross trades agreements events, $7,000 is subject to income tax. ANS T Gordon must recognize a capital gain of $7,000. The $6,000 loss on the cut-rate trades events events agreement of the personal use automobile is nondeductible. PTS 1 REF sheath 43 52. In some cases, the tax on long-run capital gains can be as low as 0%.ANS T If the taxpayers tax hold is 15% (or less), the 0% rate applies. PTS 1 REF warning 46 Tax Determination individualized and Dependency Exemptions An Overivew of Property proceeding 3-13 53. form on the sale of collectibles held f or more than 12 months is subject to tax at a rate no higher than 28%. ANS T PTS 1 REF p. 3-33 54. For 2008, Stuart has a short-run capital loss, a collectible semipermanent capital gain, and a longterm capital gain from land held as coronation. The short loss is first use to the collectible capital gain. ANS T PTS 1 REF Example 48 MULTIPLE CHOICE 1. Which, if any, of the undermentioned is a deduction from AGI? a. sustenance payments. b. Child support payments. c.Unreimbursed employee expenses. d. Loss on the sale of a personal automobile. e. none of the to a higher place. ANS C alimony payments (choice a. ) are deductions for AGI. Child support payments (choice b. ) and personal capital losses (choice d. ) are nondeductible items. PTS 1 REF Example 2 Example 43 picture 3-3 2. Which, if any, of the pertain is a deduction for AGI? a. sustainment payments. b. gratify on home mortgage. c. Unreimbursed employee expenses. d. benevolent contributions. e. no(prenominal) of the above. ANS A Except for alimony (choice a. ), all other items (choices b. , c. , and d. ) are deductions from AGI. PTS 1 REF p. 3-6 debunk 3-3 3.During 2008, Marie had the avocation minutes allowance Bank loan ( restitution used to buy personal auto) Alimony standard Child support received heritage from deceased aunt $40,000 10,000 6,000 12,000 50,000 3-14 Maries AGI is a. $40,000. b. $46,000. c. $52,000. d. $96,000. e. no(prenominal) of the above. 2009 Annual Edition/Test Bank ANS B $40,000 ( net income) + $6,000 (alimony) = $46,000. The inheritance and child support are exclusions. Amounts borrowed are not income. PTS 1 REF Example 1 open 3-1 4. During 2008, Sam had the followers(a) minutes Salary fill income on everyday Electric Corporation bonds Gift from parents division to traditionalistic IRA Lottery earnings Sams AGI is a. $59,000. b. $61,000. c. $65,000. d. $85,000. e. no(prenominal) of the above.ANS E $60,000 (salary) + $2,000 ( disport on GE bonds) $5,000 (IRA contribution) + $3,000 (lottery winnings) = $60,000. The gift from his parents is a non rateable exclusion. PTS 1 REF p. 3-5 scupper 3-1 Exhibit 3-2 $60,000 2,000 24,000 5,000 3,000 5. During 2008, Colin had the following proceeding Salary Interest income on metropolis of Denver bonds Damages for personal injury (car mishap) penitentiary damages (same car accident) Cash dividends from customary Motors Corporation credit line Colins AGI is a. $74,000. b. $120,500. c. $124,000. d. $124,500. e. $224,000. ANS C $70,000 (salary) + $50,000 (punitive damages) + $4,000 (cash dividends) = $124,000. The damages from personal injury and the municipal bond pursual are nontaxable exclusions.PTS 1 REF Example 2 Exhibit 3-1 Exhibit 3-2 $ 70,000 500 100,000 50,000 4,000 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 6. In 2008, Walter had the following transactions Salary Capital loss from a received coronation funds Moving expens e to change callings accepted repayment of $10,000 loan he made to his crony in 2004 (includes post of $1,000) Property taxes on personal residence Walters AGI is a. $67,000. b. $68,000. c. $69,000. d. $78,000. e. no(prenominal) of the above. $80,000 (4,000) (10,000) 11,000 2,000 3-15 ANS B $80,000 (salary) $3,000 (allowable loss on origin investment) $10,000 (moving expenses) + $1,000 (interest on loan) = $68,000.The jobless loss of $1,000 from the stock investment sale can be carried over to 2009. The loan repayment of $10,000 is a return of capital and has no effect on gross income. Property taxes paid on a personal residence is a deduction from AGI and has no impact on the determination of AGI. PTS 1 REF p. 3-5 p. 3-34 Exhibit 3-3 7. Monica, age 18, is claimed by her parents as a dependent. During 2008, she had interest income from a bank savings consider of $1,000 and income from a temporary job of $4,500. Monicas taxable income is a. $4,500 $4,800 = $0. b. $5,500 $ 5,350 = $150. c. $5,500 $4,800 = $700. d. $5,500 $900 $3,400 = $1,200. e. no(prenominal) of the above.ANS C Monicas standard deduction is $4,500 (earned income) + $300 = $4,800. Thus, her taxable income is $700 ($5,500 $4,800). She is not in line for a personal exemption. PTS 1 REF Example 10 8. Tony, age 15, is claimed as a dependent by his grandmother. During 2008, Tony had interest income from General Motors Corporation bonds of $1,000 and earnings from a odd-job(prenominal) job of $700. Tonys taxable income is a. $0. b. $1,700 $700 $900 = $100. c. $1,700 $1,000 = $700. d. $1,700 $900 = $800. e. no(prenominal) of the above. ANS C Tonys standard deduction of $1,000 ($700 + $300) partly offsets his gross income of $1,700, resulting in taxable income of $700. PTS 1 REF Example 10 3-16 2009 Annual Edition/Test Bank 9.Anna is a widow, age 74 and blind, who is claimed as a dependent by her son. During 2008, she received $4,800 in Social Security benefits, $1,200 in bank interest, and $1,800 in cash dividends from stocks. Annas taxable income for 2008 is a. $3,000 $900 $2,700 = $0. b. $3,000 $2,600 = $400. c. $3,000 $900 $1,350 = $750. d. $7,800 $900 $2,700 = $4,200. e. no(prenominal) of the above. ANS A Although Anna has no earned income, she is entitled to a minimum regular standard deduction of $900. She excessively is allowed additional standard deductions for age and blindness of $2,700 ($1,350 + $1,350). At this level of income, the Social Security benefits are a nontaxable exclusion.PTS 1 REF Example 9 Exhibit 3-1 Table 3-2 10. Grace, age 67 and single, is claimed as a dependent on her sons tax return. During 2008, she had interest income of $2,400 and $700 of earned income from baby sitting. Graces taxable income is a. $150. b. $750. c. $850. d. $2,100. e. no(prenominal) of the above. ANS B $3,100 gross income greater of $900 or ($700 earned income + $300) $1,350 (additional standard deduction for age 65 and older) = $750. She is not eligible for a personal exemption. PTS 1 REF Example 9 11. Troy and Edie are married and under 65 eld of age. During 2008, they furnish more than half of the support of their 18-year old daughter, Jobeth, who lives with them.Jobeth earns $15,000 from a odd-job(prenominal) job, close to of which she sets aside for future college expenses. Troy and Edie also provide more than half of the support of Troys cousin who does not live with them. Edies father, who died on January 3, 2008, at age 80, has for some years able as their dependent. How many personal and dependency exemptions should Troy and Edie claim? a. Two. b. Three. c. Four. d. flipper. e. none of the above. ANS C Four (Troy, Edie, Jobeth, and the father). Jobeth can be claimed because as a put awaying child she is not subject to the gross income test. Troys cousin does not meet the relationship test and is not a piece of their household.It is assumed that Edies father, as was true in the past, qualified as a dependent up to the p oint of death. PTS 1 REF p. 3-11 p. 3-12 p. 3-14 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 3-17 12. Evan and Eileen Carter are husband and wife and file a joint return for 2008. Both are under 65 years of age. They provide more than half of the support of their daughter, Pamela (age 25), who is a full-time medical student. Pamela receives a $3,400 scholarship covert her room and board at college. They furnish all of the support of Belinda (Evans grandmother), who is age 70 and lives in a nursing home.They also support Peggy (age 66), who is a friend of the family and lives with them. How many personal and dependency exemptions may the Carters claim? a. Two. b. Three. c. Four. d. Five. e. none of the above. ANS D Five (Evan, Eileen, Pamela, Belinda, and Peggy). Personal exemptions for the Carters and dependency exemptions for the rest. Pamela is not a passport childalthough a full-time student, she is not under age 24. Pamela does m eet the passing game relative category even though the type of scholarship aid she receives is taxable (the gross income test is satisfied). Belinda is not a phallus of the household but satisfies the relationship test.Peggy does not satisfy the relationship test but is a member of the household. PTS 1 REF p. 3-11 p. 3-12 p. 3-14 13. In which, if any, of the following situations may the individual not be claimed as a dependent of the taxpayer? a. A former spouse who lives with the taxpayer (divorce took place this year). b. A stepmother who does not live with the taxpayer. c. A married daughter who lives with the taxpayer. d. A half brother who does not live with the taxpayer and is a citizen and resident of Canada. e. A cousin who lives with the taxpayer. ANS A In the year of divorce, a former spouse cannot qualify under the member of the household test (choice a. ). The stepmother meets the relationship test (choice b. ).A married daughter can be claimed as long as she does no t botch up the joint return test (choice c. ). In the case of the half brother, Canada or Mexico can satisfy the residency test (choice d. ). A cousin does not satisfy the relationship test so must be a member of the household (choice e. ). PTS 1 REF p. 3-14 p. 3-17 3-18 2009 Annual Edition/Test Bank 14. During 2008, Jen (age 66) furnished more than 50% of the support of the following persons Jens current husband who has no income and is not claimed by person else as a dependent. Jens stepson (age 18) who lives with her and earns $6,000 as a dance instructor. He dropped out of take aim a year agone.Jens ex-husband who does not live with her. The divorce occurred 2 years ago. Jens former brother-in-law who does not live with her. Presuming all other dependency tests are met, on a separate return how many personal and dependency exemptions may Jen claim? a. Two. b. Three. c. Four. d. Five. e. None of the above. ANS C either of the persons listed except the ex-husband meet either the relationship or member of the household tests. The current husband qualifies as he has no income and is not claimed as a dependent by someone else. The stepson avoids the gross income limitation since he is a qualifying child under 19 years of age. PTS 1 REF p. 3-11 p. 3-12 p. 3-14 15.A qualifying child cannot include a. A nonresident alien. b. A married son who files a joint return. c. An uncle. d. A daughter who is away at college. e. A brother who is 28 years of age and disabled. ANS C A qualifying child can be a nonresident alien under the adopted child exception (choice a. ). The filing of a joint return is not fatal if filing is not compulsory and its purpose is to obtain a tax refund (choice b. ). An uncle does not meet the relationship test (choice c. ). A temporary absence seizure is permissible under the domicile test (choice d. ). A brother meets the relationship test, and deterioration waives the age test (choice e. ). PTS 1 REF p. 3-12 p. 3-17 16.Ellen, age 12 , lives in the same household with her father, gramps, and uncle. The cost of maintaining the household is provided by her grandfather (40%) and her uncle (60%). Disregarding tie-breaker rules, Ellen is a qualifying child as to a. All parties involved (i. e. , father, grandfather, and uncle). b. lonesome(prenominal) her grandfather and uncle. c. Only her uncle. d. Only her father. e. None of the above. ANS A Under the abode and relationship tests, Ellen is a qualifying child as to all parties. The amount of support provided by each person is not relevant. PTS 1 REF p. 3-12 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 17.Millie, age 80, is supported during the current year as follows Weston (a son) creed (a daughter) Jake (a cousin) Brayden (un colligate close family friend) portion of Support 10% 35% 35% 20% 3-19 During the year, Millie lives with Brayden. Under a duplex support agreement, indicate which parties can qualify to claim Millie as a dependent. a. Weston, Faith, Jake, and Brayden. b. Faith and Brayden. c. Weston and Faith. d. Faith, Jake, and Brayden. e. None of the above. ANS B Weston does not qualify because he does not tot more than 10% of the support. (This eliminates choices a. and c. ) Jake does not qualify because he satisfies uncomplete the relationship nor member of the household tests. (This eliminates choices a. and d. Brayden does not meet the relationship test, but he does satisfy the member of the household test. PTS 1 REF Example 27 18. The Hutters filed a joint return for 2008. They provide more than 50% of the support of Carla, Melvin, and Aaron. Carla (age 18) is a cousin and earns $4,000 from a part-time job. Melvin (age 25) is their son and is a full-time law student. He received from the university a $3,800 scholarship for tuition. Aaron is a brother who is a citizen of Israel but resides in Mexico. Carla and Melvin live with the Hutters. How many personal and dependency exempt ions can the Hutters claim on their Federal income tax return? a. Two. b. Three. c.Four. d. Five. e. None of the above. ANS C The Hutters can claim twain personal exemptions and two dependency exemptions. Carla is not a qualifying child and is subject to the gross income test. Melvin is not a qualifying child due to age (not under 24) but is a qualifying relative. meets Melvin the gross income test since this type of scholarship is nontaxable. Aaron meets the residency requirement. PTS 1 REF p. 3-11 p. 3-12 p. 3-17 Example 19 Example 21 3-20 2009 Annual Edition/Test Bank 19. For the qualifying relative rule (for dependency exemption purposes) a. The dependent must be under age 19 or a full-time student under age 24. b.The dependent must reside with the taxpayer claiming the exemption. c. The dependent need not be impactd to the taxpayer claiming the exemption. d. The dependent must be a citizen or resident of the U. S. e. None of the above. ANS C Choices a. and b. relate to th e qualifying child rules. An unrelated person can qualify if a member of taxpayers household (choice c. ). A dependent can be a citizen or resident of Canada or Mexico (choice d. ). PTS 1 REF Concept Summary 3-1 20. For tax year 2008, an exception to the kiddie tax rules includes a. A child who is a full-time student. b. A child who is married and files a joint return. c. A child who is 18 years old. d.A child whose unearned income is more than half of his or her support. e. None of the above. ANS B Student status (choice a. ) is relevant only to include, in the application of the tax, those at to the lowest degree 19 but under age 24. Choice c. relates to pre-2008 rules. Choice d. would be an exception if the reference was to earned income (not unearned income). PTS 1 REF p. 3-23 21. Kyle, whose wife died in December 2005, filed a joint tax return for 2005. He did not remarry, but has proceed to maintain his home in which his two dependent children live. What is Kyles filing stat us as to 2008? a. Head of household. b. Surviving spouse. c. Single. d. Married filing separately. e.None of the above. ANS A Kyle, who filed a joint return in 2005, was entitled to file as a surviving spouse in 2006 and 2007. In 2008, he will be entitled to file as a stop of household. PTS 1 REF Example 38 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 3-21 22. Emily, whose husband died in December 2008, maintains a household in which her dependent daughter lives. Which (if any) of the following is her filing status for the tax year 2008? (Note Emily is the executor of her husbands estate. ) a. Single. b. Married, filing separately. c. Surviving spouse. d. Head of household. e. Married, filing jointly.ANS E As the executor, it is flimsy that she would refuse to consent to a joint return. Since she is deemed married in the year of her husbands death, she cannot file as single (choice a. ) or nous of household (choice d. ). She does not q ualify for surviving spouse status until the next year (i. e. , 2009). PTS 1 REF p. 3-30 23. Which of the following taxpayers may file as a address of household in 2008? Ron provides all the support for his mother, Betty, who lives by herself in an flat tire in Fort Lauderdale. Ron pays the rent and other expenses for the apartment and properly claims his mother as a dependent. Tammy provides over one-half the support for her 18-year old brother, Dan.Dan earned $4,200 in 2008 functional at a fast fodder restaurant and is saving his money to attend college in 2009. Dan lives in Tammys home. Joes wife leave him late in December of 2007. No legal action was taken and Joe has not heard from her in 2008. Joe supported his 6-year-old son, who lived with him passim 2008. a. Ron only. b. Tammy only. c. Joe only. d. Ron and Joe only. e. Ron, Tammy, and Joe. ANS E Ron may file as a head of household. His mother is not required to live in his household in order for him to qualify as a h ead of household. Tammy can claim Dan as a dependent because Dan is a qualifying child and is not subject to the gross income requirement.Joe can file as a head of household under the abandoned spouse rules. PTS 1 REF p. 3-30 p. 3-31 3-22 2009 Annual Edition/Test Bank 24. Wilma is married to Herb, who abandoned her in 2006. She has not seen or communicated with him since June of that year. She maintains a household in which she and her two dependent children live. Which of the following arguings about Wilmas filing status in 2008 is slump? a. Wilma can use the rates for single taxpayers. b. Wilma can file a joint return with Herb. c. Wilma can file as a surviving spouse. d. Wilma can file as a head of household. e. None of the above statements is appropriate. ANS D Wilma meets the abandoned spouse rules.Therefore, she can file as a head of household. Otherwise, her filing status would be married, filing separately. PTS 1 REF p. 3-31 25. Arnold is married to Sybil, who abandoned h im in 2006. He has not seen or communicated with her since April of that year. He maintains a household in which their son, Evans, lives. Evans is age 25 and earns over $20,000 each year. For tax year 2008, Arnolds filing status is a. Married, filing jointly. b. Married, filing separately. c. Head of household. d. Surviving spouse. e. Single. ANS B Arnold cannot file jointly without Sybils consent (choice a. ). He is not an abandoned spouse since Evans is not a dependent child.Evans cannot be claimed as a qualifying child (age test) and is not a qualifying relative (gross income test). Because Arnold is still treated as universe married, his only option is married, filing separately (choice b. ). PTS 1 REF p. 3-29 to 3-32 26. During the year, Kim sold the following assets business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming equal income, how much of these losses may Kim claim? a. $0. b. $1,000. c. $2,000. d. $3,000. e . None of the above. ANS C The loss on the business auto of $1,000 is an nondescript loss, while the loss on the stock investment of $1,000 is a capital loss. The loss on the yacht of $1,000 is personal and, therefore, cannot be deducted.PTS 1 REF p. 3-33 Example 43 Example 44 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 27. Perry is in the 33% tax hold up. During 2008, he had the following capital asset transactions move in from the sale of a stamp assembly (held for 10 years) crap from the sale of an investment in land (held for 4 years) Gain from the sale of stock investment (held for 8 months) Perrys tax consequences from these gains are as follows a. (15% $10,000) + (28% $30,000) + (33% $4,000). b. (15% $30,000) + (33% $4,000). c. (5% $10,000) + (28% $30,000) + (33% $4,000). d. (15% $40,000) + (33% $4,000). e. None of the above. 30,000 10,000 4,000 3-23 ANS A Collectibles are taxed at a maximum of 28%, while long-term capital gains are subject to a top rate of 15%. Short-term capital gains are treated the same as usual income. PTS 1 REF p. 3-33 28. Kirby is in the 15% tax bracket and had the following capital asset transactions during 2008 semipermanent gain from the sale of a coin collection semipermanent gain from the sale of a land investment Short-term gain from the sale of a stock investment Kirbys tax consequences from these gains are as follows a. (5% $10,000) + (15% $13,000). b. (0% $10,000) + (15% $13,000). c. (15% $13,000) + (28% $11,000). d. (15% $23,000). . None of the above. ANS B Collectibles and short-term capital gains are taxed at Joans regular 15% tax bracket, while longterm capital gains are subject to a rate of 0% (5% prior to 2008). PTS 1 REF p. 3-33 $11,000 10,000 2,000 29. For the current year, David has salary income of $80,000 and the following property transactions Stock investment sales long-run capital gain Short-term capital loss Loss on sale of motor home (purchased 4 year s ago and used for family vacations) $ 9,000 (11,000) (2,000) 3-24 2009 Annual Edition/Test Bank What is Davids AGI for the current year? a. $76,000. b. $77,000. c. $78,000. d. $89,000. e. None of the above.ANS C The loss from the sale of the camper is personal and, therefore, is not deductible. Netting the short-term capital loss of $11,000 against the long-term capital gain of $9,000 produces a net short-term capital loss of $2,000. Offsetting the capital loss against cut-and-dry income yields AGI of $78,000 ($80,000 $2,000). PTS 1 REF Example 43 Example 49 30. During 2008, Trevor has the following capital transactions LTCG Long-term collectible gain STCG STCL $ 6,000 2,000 4,000 10,000 After the gain process, the following results a. Long-term collectible gain of $2,000. b. LTCG of $6,000, Long-term collectible gain of $2,000, and a STCL of $6,000. c.LTCG of $6,000, Long-term collectible gain of $2,000, and a STCL carryover to 2009 of $3,000. d. LTCG of $2,000. e. None of the above. ANS D First, the STCG and STCL are combined, resulting in a STCL of $6,000. Of this STCL, $2,000 is applied against the collectible gain of $2,000, and the $4,000 balance is applied against the LTCG of $6,000. The result is a LTCG of $2,000. PTS 1 MATCHING Match the statements that relate to each other. Note Choice L may be used more than once. a. Not available to 65-year old taxpayer who itemizes b. Exception for U. S. citizenship or residency test (for dependency exemption purposes) c. Largest basic standard deduction available to a dependent who has no earned income d.Not considered for dependency exemption purposes e. Qualifies for head of household filing status f. A child (age 15) who is a dependent and has only earned income. g. Not considered in applying support test (for dependency exemption purposes) h. Phaseout of personal and dependency exemptions i. Unmarried taxpayer who can use the same tax rates as married persons filing jointly j. Exception to the support te st (for dependency exemption purposes) k. A child (age 16) who is a dependent and has net unearned income l. No correct match provided REF Example 48 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.Abandoned spouse Stealth tax Additional standard deduction Scholarship funds Surviving spouse Marriage penalty Canada and Mexico Age of a qualifying relative $900 Kiddie tax applies Kiddie tax does not apply Multiple support agreement 3-25 1. ANS E PTS 1 REF p. 3-31 non An abandoned spouse qualifies for head of household filing status. 2. ANS H PTS 1 REF p. 3-20 non An example of a stealth tax is the phaseout of exemptions. Tax in the News on p. 3-20 3. ANS A PTS 1 REF p. 3-8 NOT A taxpayer who itemizes (claims deductions from AGI) is not eligible for either the basic or additional standard deductions. 4. ANS G PTS 1 REF p. 3-14 p. -15 NOT Scholarship funds are not considered when applying the support test. The taxable portion of scholarships are taken into account in applying the gross income test. 5. ANS I PTS 1 REF p. 3-30 6. ANS L PTS 1 REF p. 3-29 NOT The traditional marriage penalty applied in some cases where married persons filed a joint return. 7. ANS B PTS 1 REF p. 3-17 NOT Citizenship or residency in these countries will suffice. 8. ANS D PTS 1 REF p. 3-19 9. ANS C PTS 1 REF p. 3-10 NOT This amount could be greater if earned income exists. 10. ANS K PTS 1 REF p. 3-25 11. ANS F PTS 1 REF p. 3-23 NOT The kiddie tax is inapplicable in situations where the child has no unearned income. 12. ANS J PTS 1 REF p. -15 Match the statements that relate to each other. Note Choice L may be used more than once. a. available to a 70-year-old father claimed as a dependent by his son b. The highest income tax rate applicable to a taxpayer c. touch to tax obligation divided by taxable income d. Not eligible for the standard deduction e. No one qualified taxpayer meets the support test f. T axpayers cousin does not qualify g. A dependent child (age 17) who has only unearned income h. Highest applicable rate is 35% i. Applicable rate could be as low as 0% j. Maximum rate is 28% k. Income from foreign sources not subject to tax l. No correct match provided 3-26 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 009 Annual Edition/Test Bank Multiple support agreement Kiddie tax not enforce Nonresident alien Tax graze Schedule Gain on collectibles (held more than one year) Marginal income tax rate Average income tax rate Additional standard deduction Relationship test (for dependency exemption purposes) Long-term capital gains Global system of taxation Territorial system of taxation 13. ANS E PTS 1 REF p. 3-15 NOT A qualified taxpayer is one who satisfies the more-than-10% contribution test and meets all of the other requirements for claiming a dependency exemption. 14. ANS L PTS 1 REF p. 3-23 NOT The kiddie tax can apply when the child has unearned income. 15. ANS D PTS 1 R EF p. 3-9 16. ANS H PTS 1 REF p. 3-21 17. ANS J PTS 1 REF p. 3-33 18. ANS B PTS 1 REF p. 3-21 19. ANS C PTS 1 REF p. 3-21 20.ANS A PTS 1 REF Example 9 21. ANS F PTS 1 REF p. 3-14 NOT A cousin can qualify as a dependent under the member of the household test but not under the relationship test. 22. ANS I PTS 1 REF Example 46 23. ANS L PTS 1 REF p. 3-5 NOT Global Tax Issues on p. 3-5 24. ANS K PTS 1 REF p. 3-5 NOT Global Tax Issues on p. 3-5 Regarding dependency exemptions, classify each statement in one of the four categories a. Could be a qualifying child. b. Could be a qualifying relative. c. Could be either a qualifying child or a qualifying relative. d. Could be neither a qualifying child nor a qualifying relative. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36.A son lives with taxpayer and is self-supporting A daughter who does not live with taxpayer A granddaughter, who lives with taxpayer, is 24 years old, and a full-time student An uncle who lives with taxpayer A nephew who l ives with taxpayer A niece who does not live with taxpayer A half brother who lives with taxpayer A cousin who does not live with taxpayer A step daughter who lives with taxpayer A daughter-in-law who does not live with taxpayer A family friend who is supported by and lives with taxpayer An ex-husband (divorce occurred two years ago) who lives with taxpayer Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. ANS ANS ANS ANS ANS ANS ANS ANS ANS ANS ANS ANS D B B B C B C D C B B B PTS PTS PTS PTS PTS PTS PTS PTS PTS PTS PTS PTS 1 1 1 1 1 1 1 1 1 1 1 1 REF REF REF REF REF REF REF REF REF REF REF REF p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 p. 3-11 to 3-15 3-27 PROBLEM 1.Eva had the following transactions during 2008 Salary Interest income on bonds Issued by City of Bal timore Issued by Dell Corporation Alimony received Child support received City and state income taxes paid Bank loan obtained to pay credit card debt What is Evas AGI for 2008? ANS $86,000. $80,000 (salary) + $3,000 (interest on Dell Corporation bonds) + $3,000 (alimony received). Interest on the City of Baltimore bonds and the child support payments are exclusions from gross income. The bank loan has no tax effect, as Eva is have to repay the amount borrowed. City and state income taxes are deductions from AGI. PTS 1 REF Example 1 Example 2 Exhibit 3-1 to 3-3 $80,000 $2,000 3,000 5,000 3,000 9,000 4,000 10,000 3-28 2009 Annual Edition/Test Bank 2.Scott had the following transactions for 2008 Salary Alimony paid Recovery from car accident Personal injury damages Punitive damages Gift from parents Property sales Loss on sale of sailing boat (used for pleasure and owned 4 years) Gain on sale of GMC stock (held for 8 months as an investment) What is Scotts AGI for 2008? ANS $164,00 0. $90,000 (salary) $6,000 (alimony paid) + $75,000 (punitive damage award) + $5,000 (short-term capital gain on the sale of stock investment). The personal injury recovery and the gift from Scotts parents are exclusions from gross income. The loss from the sale of the sailboat is personal and, therefore, nondeductible. The short-term capital gain on the sale of the GMC stock is taxed in full as indifferent income. PTS 1 REF p. 3-6 p. 3-33 Exhibit 3-1 Exhibit 3-2 Example 43 $ 90,000 6,000 $50,000 75,000 125,000 24,000 ($ 3,000) 5,000 2,000 3.Kristen had the following transactions for 2008 Salary Moving expenses incurred to change jobs Inheritance received from deceased uncle Life policy proceeds from policy on uncles emotional state (Kristen was named the beneficiary) Cash prize from church give Payment of state income tax What is Kristens AGI for 2008? ANS $76,000. $80,000 (salary) + $5,000 (raffle prize) $9,000 (moving expenses). The inheritance and life insurance proceeds are exclusions from gross income. The payment by Kristen of her state income tax is a deduction from AGI. Thus, it does not enter into the determination of AGI. PTS 1 REF p. 3-5 Exhibits 3-1 to 3-3 $ 80,000 9,000 400,000 100,000 5,000 4,000 4. warren, age 17, is claimed as a dependent by his father. In 2008, Warren has dividend income of $1,500 and earns $400 from a part-time job. . b. What is Warrens taxable income for 2008? Suppose Warren earned $1,200 (not $400) from the part-time job. What is Warrens taxable income for 2008? Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 3-29 ANS a. $1,000. Warrens standard deduction is the greater of $400 (earned income) + $300 or $900. Thus, $1,500 + $400 $900 = $1,000 taxable income. b. $1,200. Warrens standard deduction now becomes $1,500 ($1,200 + $300). Thus, $1,500 + $1,200 $1,500 = $1,200 taxable income. REF Example 8 Example 10 PTS 1 5. Allison, age 22, is a full-time law student and is clai med by her parents as a dependent.During 2008, she received $1,300 interest income from a bank savings account and $5,300 from a parttime job. What is Allisons taxable income for 2008? ANS $1,150. Allisons standard deduction is the greater of $5,300 (earned income) + $300 or $900. But the $5,600 is limited to $5,450 (the standard deduction allowed a single person). Thus, $1,300 + $5,300 $5,450 = $1,150 taxable income. PTS 1 REF Example 11 6. Heloise, age 74 and a widow, is claimed as a dependent by her daughter. For 2008, she had income as follows $2,500 interest on municipal bonds $3,200 Social Security benefits $3,000 income from a part-time job and $2,800 dividends on stock investments.What is Heloises taxable income for 2008? ANS $1,150. $3,000 (income from job) + $2,800 (dividends) $3,300 (basic standard deduction is $3,000 + $300) $1,350 (additional standard deduction for age) = $1,150. The Social Security benefits of $3,200 and the interest on municipal bonds of $2,500 are no t taxable. PTS 1 REF Table 3-1 Example 9 7. Pablo is married to Elena, who lives with him. Both are U. S. citizens and residents of Kansas. Pablo furnishes all of the support of his parents, who are citizens of Nicaragua and residents of Mexico. He also furnishes all of the support of Elenas parents, who are citizens and residents of Nicaragua. Elena has no gross income for the year.If Pablo files as a married person filing separately, how many personal and dependency exemptions can he claim on his return? ANS Four. A personal exemption for Pablo and Elena and dependency exemptions for Pablos parents. Elena can be claimed because she has no income. Presumably she is not cosmos claimed as a dependent by another. Although Pablos parents are neither U. S. citizens nor residents, they are residents of Mexico. Elenas parents meet neither the citizenship nor residency tests. PTS 1 REF p. 3-10 p. 3-17 3-30 2009 Annual Edition/Test Bank 8. bulls eye (age 68) and his wife Jean (age 70) f ile a joint return. They furnish all of the support of Luther (Homers 90-year old father), who lives with them.For 2008, they received $6,000 of interest income on city of Chicago bonds and interest income on corporate bonds of $48,000. Compute Homer and Jeans taxable income for 2008. ANS $24,500. Their gross income is $48,000 since the $6,000 interest on municipal bonds is an exclusion. They are entitled to a basic standard deduction of $10,900 and additional standard deductions of $1,050 each for be age 65 or older. They can claim a dependency exemption of $3,500 for Luther and two personal exemptions for themselves. Thus, $48,000 $10,900 $2,100 (2 $1,050) $10,500 (3 $3,500) = $24,500. PTS 1 REF p. 3-10 p. 3-13 Exhibit 3-1 Table 3-1 Table 3-2 9.Ellen, age 39 and single, furnishes more than 50% of the support of her parents, who do not live with her. Ellen practices as a self-employed interior designer and has gross income in 2008 of $120,000. Her deductions are as follows $3 0,000 business and $7,900 itemized. a. b. What is Ellens taxable income for 2008? Can Ellen qualify for head of household filing status? Explain. ANS a. $71,500. $120,000 (gross income) $30,000 (business deductions for AGI) = $90,000 (AGI) $8,000 (standard deduction) $3,500 (personal exemption) $7,000 (dependency exemptions for parents) = $71,500 taxable income. The answer presumes that the parents meet the other dependency exemption tests (e. g. , gross income) besides support. b.Ellen can qualify for head of household filing status if she furnishes more than half of the cost of maintaining her parents household. Also, at least(prenominal) one of Ellens parents must qualify as her dependent (see part a. above). REF p. 3-5 p. 3-10 p. 3-13 Table 3-1 Example 42 PTS 1 10. Ashley earns a salary of $35,000, has capital gains of $4,000, and interest income of $3,000 in 2008. Her husband died in 2007. Ashley has a dependent son, Tyrone, who is age 8. Her itemized deductions are $8,00 0. a. b. Calculate Ashleys taxable income for 2008. What is her filing status? $35,000 4,000 3,000 $42,000 (10,900) (7,000) $24,100 ANS a. Salary Capital gains Interest AGI Less Standard deduction Less Personal exemption and dependency deduction ($3,500 2) Taxable income b.Ashley satisfies the requirements for a surviving spouse. PTS 1 REF p. 3-10 p. 3-30 Table 3-1 Figure 3-1 11. During the year, Keith has the following transactions Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions Loss from the sale of a business computer Loss from the sale of a personal use auto Long-term loss from the sale of land held for investment Short-term gain from the sale of a stock investment How are these transactions handled for income tax purposes? 3-31 $3,500 1,500 5,000 1,000 ANS $3,500 ordinary loss and $3,000 capital loss deduction. The $1,000 unused capital loss can be carried over to the next year.The $1,500 loss from the sale of a personal use auto is not allowed. PTS 1 REF Example 44 Example 49 12. During 2008, Dena has the following gains and losses LTCG LTCL STCG STCL a. b. How much is Denas tax liability if she is in the 15% tax bracket? If her tax bracket is 33% (not 15%)? $4,000 1,000 500 3,000 ANS a. $0. After the sign netting process, there is a LTCG of $3,000, and a STCL of $2,500. The $2,500 of STCL is applied to the LTCG of $3,000. The final result is a net LTCG of $500 taxed at 0% for a tax liability of $0. b. $75. clear part a. for the netting process. Now the $500 is taxed at 15% for a tax liability of $75. REF Example 46 Example 47 PTS 1 13.During 2008, Marlo had the following capital gains and losses Gain from the sale of coin collection (held three years) Gain from the sale of land held as an investment for six years Gain from the sale of stock held as an investment (held for 10 months) a. b. How much is Marlos tax liability if he is in the 15% tax bracket? If his tax bracket is 33% (not 15%)? $5,000 4,000 1, 000 ANS a. $1,100. Gain of $5,000 on the sale of the coin collection is taxed at 15% (lesser of 28% or 15%). The same is true for the short-term gain of $1,000. The gain of $4,000 on the sale of the land is taxed at 0%. Thus, (15% $6,000) + (0% $4,000) = $900. b. $2,330. (33% $1,000) + (28% $5,000) + (15% $4,000) = $2,330. PTS 1 REF p. 3-33 Example 46 Example 47 14.During 2008, Blaine has salary income of $100,000 and the following capital transactions 3-32 2009 Annual Edition/Test Bank LTCG LTCL STCL $10,000 (14,000) (3,000) How are these transactions handled for income tax purposes in 2008 and, if applicable, in future years? ANS First, netting the long-term transactions yields a net long-term capital loss of $4,000 $10,000 (gain) $14,000 (loss). Second, apply the $3,000 short-term capital loss against ordinary income. Third, carry the unused $4,000 net long-term capital loss over to 2009. PTS 1 ESSAY 1. Mr. Lee is a citizen and resident of Hong Kong, while Mr. Anderson is a cit izen and resident of the U. S. In the taxation of income, Hong Kong uses a territorial approach, while the U. S. follows the global system. In terms of effect, relieve what this means to Mr. Lee and Mr. Anderson. ANS Mr.Lee is taxed only on the income he receives from Hong Kong, while Mr. Anderson is taxed on his global income. Under the U. S. approach, a citizen or resident is taxed on a worldwide basis. Since the U. S. system could lead to the same income creation taxed twice, various relief provisions are necessitated (e. g. , foreign tax credit). PTS 1 REF Global Tax Issues on p. 3-5 REF Example 49 2. In consolatory the support test and the gross income test for claiming a dependency exemption, a scholarship received by the person being claimed is handled the same way for each test. Do you agree or disagree with this statement? Why? ANS Disagree. For purposes of the support test, all of the scholarship is disregarded.For purposes of the gross income test, only the taxable pa rt is considered (i. e. , the nontaxable part is disregarded). PTS 1 REF p. 3-12 p. 3-14 Tax Determination Personal and Dependency Exemptions An Overivew of Property Transactions 3-33 3. In order to claim a dependency exemption for other than a qualifying child, a taxpayer must meet the support test. Generally, this is done by furnishing more than 50% of a dependents support. What exceptions exist, if any, where the support furnished need not be more than 50%? ANS One exception involves the multiple support agreement. Here, family members collectively furnish more than 50% of the support, but no one person does so.For those qualified individuals who contribute more than 10%, the group can orient which person may claim the dependency exemption. The second exception involves the divorced parents of children. The custodial parent is entitled to the dependency exemptions for the children. If this parent agrees not to claim the exemption(s), then the noncustodial parent may do so. PTS 1 REF p. 3-15 p. 3-16 4. In applying the gross income test in the case of dependents that are married, could the application of residential district property laws have any effect? Explain. ANS Most often, the application of community property laws will impact on the dependency status of the spouse of a qualifying child.Suppose, for example, Roger maintains a household that includes his 18-year-old daughter, Alice, and her husband, Craig. impound further that Alice earns $8,000 from a part-time job while Craig has no income. In a common law state, Craig meets the gross income test (i. e. , $0) while Alices gross income, as a qualifying child, is immaterial. In a community property state, however, Craig now violates the gross income test with $4,000 (50% $8,000) of income, while Alice remains immune. PTS 1 REF p. 3-36 5. In meeting the criteria of a qualifying child for dependency exemption purposes, when if ever, faculty the childs income become relevant? ANS The amount of incom e earned by the qualifying child normally is of no consequence.If, however, such income is used to make the child self-supporting, then he or she can no longer be a qualifying child. Such child also would not be a qualifying relative due to the gross income and support tests. PTS 1 REF p. 3-12 3-34 2009 Annual