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ACC307 Federal Taxation "Tax Implications" Please respond to the following (one paragraph only): · A friend asks you for some advice since she knows you are taking this tax class. She has a son who...

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ACC307 Federal Taxation

"Tax Implications" Please respond to the following (one paragraph only):

· A friend asks you for some advice since she knows you are taking this tax class. She has a son who just started college and he is pretty handy. He usually charges $15 per hour for his services, but is starting to fall behind in his schoolwork. He has a friend who is willing to tutor him at $20 per hour. They have come to an agreement that her son and the tutor will exchange “handyman” services for tutoring services. Explore the tax implications of this arrangement and whether the $5 per hour difference has any implications. Be sure to be specific and cite specific concepts.

Answered Same Day Dec 26, 2021

Solution

Robert answered on Dec 26 2021
131 Votes
Solution-
According to case the a
angement will impact to both son and his tutor. For son all amounts which he earns is taxable despite of reinvestment of the a
angement. The applicable tax on son is subject to self-employment tax, son have to file the tax on his income. Son and his tutor also...
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