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malfutka [58]
3 years ago
14

Jonas is a 60% owner of Ard, an S corporation. At the beginning of the year, his stock basis is zero. Jonas's basis in a $20,000

loan made to Ard and evidenced by Ard's note has been reduced to $0 by prior losses. During the year, Jonas's net share of Ard's taxable income is $10,000. At the end of the year, Ard makes a $15,000 cash distribution to Jonas. After these transactions, what is Jonas’s basis in his stock, and what is his basis in the debt? What is Jonas’s recognized capital gain?
Business
1 answer:
lana [24]3 years ago
8 0

Answer:

The correct answer is $0 , $0 and $5,000.

Explanation:

According to the scenario, computation of the given data are as follow:-

a) After these transactions, Jonas’s basis in his stock is decreased by the cash distribution and increased by the net income So, it's basis in his stock is $0.

b) Jonas basis in the debt is loan made to Ard and reduced to $0 by prior losses.

We can calculate the capital gain by using following formula:-

c) Jonas’s recognized capital gain= Cash Distribution–Taxable Income

= $15,000 - $10,000

=$5,000

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As now the employer is no longer paying the amount for the health insurance, so now Susan has to pay $525 herself for the health insurance.

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3 years ago
Riley, age 16, and Samuel, age 36, enter into a contract in which Riley will sell Samuel his car for $11,000. The next day, Samu
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Answer: The answer is that Riley cannot enforce the contract because he is a minor.

Explanation:

Contract is an agreement between two or more individuals which is enforceable by the law. For a contract to be considered valid in law it must contain some essential elements such as the following

Offer: This is the person who is making the offer in the contract agreement, known as the offeror

Acceptance : This is the person who is willing to accept the offer, known in this case as the offeree.

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Intention to create legal relations :The parties in contract must agree to enter into a legal relationship as regard the contract.

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Legality : The contract must not contrary to the law , it must be seen to be legal according to the law .

Therefore, in the question under review, Riley is 16 years, by law he is a minor, he has not fulfilled one of the essential elements of a valid contract which is capacity. The law states that, any contract enter into with a minor is null and void according to law.because, as at the time of entering into the contract such a minor is not capable of entering into the contract. Therefore, Riley will not be able to enforce the contract because he is a minor.

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