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TEA [102]
2 years ago
6

On September 30 of last year, Rex received some investment land from Holly as a gift. Holly’s adjusted basis was $50,000 and the

land was valued at $40,000 at the time of the gift. Holly acquired the land five years ago. What is the amount and character of Rex's recognized gain (loss) if he sells the land on May 12 this year at the following prices?A) $32,000B) $70,000C) $45,000
Business
1 answer:
Pachacha [2.7K]2 years ago
4 0

Answer:

A) On the 32,000 sale it will be considered a 18,000 gift to the buyer.

Because is above the 15,000 gift per person per year, it will trigger the gift tax.

B) 70,000 will generate a long-term capital gain of 20,000

C) gift of 5,000 it will not trigger the gift tax.

Explanation:

When the sale is below market value, it is treated as a gift to the buyer.

The capital gain or losses are considered using the adjusted basis.

Because Holly acquiredthe land for more than a year, it will be cosnidered a long-term capital gain if any.

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"Find the amount of each payment to be made into a sinking fund which earns 7​% compounded quarterly and produces ​$50 comma 000
Elodia [21]

Answer:

Quarterly deposit= $3,182.78

Explanation:

Giving the following information:

A sinking fund earns 7​% compounded quarterly and produces ​$50,000 at the end of 3.5 years.

We need to find the quarterly deposit made at the end of each period.

<u>First, we need to calculate the quarterly interest rate:</u>

Interest rate= 0.07/4= 0.0175

To calculate the deposit, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

n= 3.5*4= 14

FV= 50,000

i= 0.0175

A= (50,000*0.0175)/ [(1.0175^14)-1]= $3,182.78

3 0
3 years ago
An asset is purchased on January 1 for $44,700. It is expected to have a useful life of five years after which it will have an e
Black_prince [1.1K]

Answer:

Gain of $2,780

Explanation:

Calculation to determine what The company will record If it is sold for $32,000 exactly two years after it is purchased

First step is to calculate the Annual depreciation expense using this formula

Annual depreciation expense = (Cost − Residual value) × (1 ÷ Useful life)

Let plug in the formula

Annual depreciation expense = ($44,700 − $6,000) × (1 ÷ 5)

Annual depreciation expense =$38,700× (1 ÷ 5)

Annual depreciation expense =$ 7,740

Second step is to calculate the Accumulated depreciation using this formula

Accumulated depreciation = Year 1 depreciation expense + Year 2 depreciation expense

Let plug in the formula

Accumulated depreciation = $7,740 +$7,740

Accumulated depreciation = $15,480

Now let calculate the Gain (loss) on disposal

Using this formula

Gain (loss) on disposal = Proceeds from sale − (Cost − Accumulated Depreciation at time of sale)

Let plug in the formula

Gain (loss) on disposal = $32,000 − ($44,700 − $15,480)

Gain (loss) on disposal =$32,000-$29,220

Gain (loss) on disposal=$2,780

Therefore If it is sold for $32,000 exactly two years after it is purchased, the company will record a GAIN of $2,780

5 0
3 years ago
Zoning regulations often prevent a landowner from doing whatever she wants with her property. Some people believe that such zoni
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Answer:

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3 years ago
Suppose business decision makers become more optimistic about the future and, as a result, increase their investment spending by
Art [367]

Answer:

$80 million

Explanation:

We know that

Multiplier = (1) ÷ (1 - marginal propensity to consume)

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Now the GDP would increase by

= Increase in  Investment spending × multiplier effect

= $20 billion × 4

= $80 million increase

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2 years ago
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torisob [31]
Your answer is.......C) Natalie, who has business experience with accounting, management, and marketing
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3 years ago
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