US Taxation Benchmark #3 Assignment Example | Topics and Well Written Essays - 750 words

US Taxation Benchmark #3 - Assignment Example The fact that Mia does not paint for the purpose of profit qualifies her artwork venture as a hobby rather than a business. Since Mia’s expenses are hobby expenses, she may not claim a loss from her artwork, although she can deduct the expense from the income from her artworks. An expense is reasonable if, in its nature and amount, it does not exceed what a prudent person would incur in the context of competitive business. Reasonableness of specific expenses must be examined with precise care in connection with the motive of the business venture, whether for profit or non-profit. If an initial review of the facts results in a test of a specific expense by the business entity, the burden of proof shall be upon the entity to establish that such expense is reasonable. A reasonable expense depends on a variety of factors such as whether it is the type of expense generally recognized as necessary and ordinary for the conduct of the entity’s business. Furthermore, the trading activities should exhibit adherence to relevant laws and regulations, generally accepted sound business practices, and arm’s-length bargaining. The U.S congress enacted the Internal Revenue Code in order to tax net income. According to the legislation, taxable income, whether obtained illegally or legally is subject to federal income tax rules. A business bad debt is a loss due to the worthlessness of a debt was created in the course of the business or it closely related to the business entity when it became worthless. Debts closely relate to a business if the primary motive of incurring them is business related. The main cause of business bad debt is credit sales. Businesses deduct their bad debts from the gross income when figuring their taxable income. Businesses can deduct bad debts in part or in full. Businesses can claim a business bad debt using either the nonaccrual experience method or the specific charge-off method. Nonbusiness debts

Strategic Situation Analysis of ARM Holdings Coursework

Strategic Situation Analysis of ARM Holdings - Coursework Example Instead of their own cost associated manufacturing of semiconductor business, they licence their own designed technology to other semiconductor manufacturers across the world and they utilise the designs to make innovative low energy chips for modern hi-tech electronic devices (ARM Ltd, 2012). This business report contains an in-depth analysis of some important areas like the current strategic situation of ARM Holdings which includes analysis of the industry or sector which has the key findings of current scenario, opportunities, challenges, future growth etc. Analysis of the organization’s current business strategies like SWOT analysis, value chain analysis, market positioning, product differentiation etc; critical appraisal of these strategies which results the key findings of the important business characteristics like sustainability, competitive advantages and extent of outcome of these strategies with respect current industry scenario will also be discussed in this report. Industry or Business Environment Analysis Companies in the microprocessor industry make hi-tech chips which are the core or heart of many digital electronic products which include but are not limited to computers, mobile phones, calculators, digital cameras, video game consolers and PDAs. First microprocessor which was invented for commercial use was Intel 4004 (Roony, 2012). Some of the top blue chip companies can be found in this industry and they have been continuously producing innovative chips which have brought remarkable results in today’s advanced digital electronics world. ... Effective implementation of extended business model ARM can is innovating additional types of advanced technology, generating strong royalties to the brand from a single multipurpose hi-tech microprocessor. The company’s financial policies and objectives can balance the essential need for continuous investment inflow to generate long term sustainable growth for the company. The value to per consumer is increasing day by day with the spread of digital embedded of devices across the world.