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Elena-2011 [213]
3 years ago
14

When Padgett Properties LLC was formed, Nova contributed land (value of $340,500 and basis of $85,125) and $170,250 cash, and Os

car contributed cash of $510,750. Both partners received a 50% interest in partnership profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ . b. What is Padgett's tax basis in the land? $ c. If Padgett sells the land several years later for $510,750, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $ .
Business
1 answer:
max2010maxim [7]3 years ago
7 0

Answer:

See the explanation below:

Explanation:

a. How is the land recorded for § 704(b) book capital account purposes? For § 704

Debit cash with $170,250

Debit land with $340,500

Credit Nova's Capital account with $510,750

b. What is Padgett's tax basis in the land?

Padgett's tax basis in the land is $85,125 that is carried over.

c. If Padgett sells the land several years later for $510,750, how much tax gain will Nova and Oscar report?

Built in gain = $340,500 - $85,125 = $255,375

Gain from sale = $510,750 - $340,500 = $170,250

Share of gain from sale = $170,250 * 50% = $85,125

Gain to report by Nova = Built in gain + Share of gain from sale = $255,375 + $85,125 = $340,500

Gain to report by Oscar = Share of gain from sale = $170,250 * 50% = $85,125

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Union Local School District has bonds outstanding with a coupon rate of 4.9 percent paid semiannually and 20 years to maturity.
RUDIKE [14]

Answer:

Ans. Price of the bond is $9,250.57

Explanation:

Hi, first we need to establish the semi-annual coupon of the bond and the semi-annual discount rate (YTM semi-annually)

Coupon=10000*(4.9%/2)= $245

To turn the annaul YTM to semi-annual, we have to use the following equation

YTM(semi-annual)=(1+YTM)^{\frac{1}{2} } -1

YTM(semi-annual)=(1+0.056)^{\frac{1}{2} } -1=0.0276

After all this, we are ready to find the price, here is the math of this.

Price=\frac{245((1+0.0276)^{39}-1) }{0.0276(1+0.0276)^{39} } +\frac{(245+10000)}{(1+0.0276)^{40} } =9250.57

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4 0
3 years ago
In a period of falling interest rates, a bond dealer would engage in which of the following activities?I Raise prices in interde
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Answer:

C. I, II, III

Explanation:

In a period of falling interest rates, a bond dealer would engage in all of the following activities except for IV. Therefore, a dealer would raise his quoted price in Bloomberg. If the dealer has an appreciated bond that he wishes to sell, he can place ''Request for Bids'' for those bonds in Bloomberg. The dealer may buy bond the he has previously sold short to limit losses due to rising price. To protect existing short position against the rising price, the dealer will buy call options, not put options. Put options are used in protecting existing long position from falling price.

8 0
3 years ago
An innovative change involves ______ complexity, cost, and uncertainty.
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5 0
3 years ago
Suppose that the united states and canada each produce only two products, televisions and food. The united states can produce 10
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6 0
3 years ago
Suppose a company is financed with $20 million of equity and $60 million of debt. That is, the company obtained $20 million from
alexgriva [62]

Answer:

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