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Aleks04 [339]
3 years ago
15

Four years ago, Company PJ acquired 1,000 acres of undeveloped land. On the date of the exchange, the land's FMV was $700,000. D

uring the past four years, the land appreciated in value. by $600,000; a recent appraisal indicated that it is worth $1.3 million today. Howaver, if company PJ sells the land for $1.3 million, the taxable gain will be $825,000. Can you explain this results?
Business
1 answer:
zvonat [6]3 years ago
4 0

Answer:

The purchase price, commission and other expenses is of $475,000 deducted from the sales proceed of $1.3 million to arrive at the taxable gains of $825,000.

Explanation:

Taxable gain is a profit realized from the sale of assets that are not inventories. These assets can be fixed assets such land, building, machinery, etc., financial assets like stocks, bonds,etc, and other non-inventory assets.

A capital gain tax rate is applied to the taxable gain to obtain capital gain tax payable.

From the question, the $825,000 taxable gain is the profit realized by Company PJ from selling the acres of undeveloped land after deducting its cost of purchase and other relevant allowable expenses and sales commission from the sales proceed of $1.3 million.

The purchase price, commission and other expenses is therefore equal to $475,000 (i.e. $1,300,000 - $825,000 = $475,000).

In summary, taxable gain is sales proceed minus purchase price, commission and other expenses. We can therefore have:

Taxable gain = $1,300,000 - $475,000 = $825,000.

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Tax laws permit installment sales, which are recognized in the year of sale for financial reporting purposes, to be reported in
Lera25 [3.4K]

Answer:

lower; higher.

Explanation:

Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.

The different types of tax include the following;

1. Income tax: a tax on the money made by workers in the state. This type of tax is paid by employees with respect to the amount of money they receive as their wages or salary.

2. Property tax: a tax based on the value of a person's home or business. It is mainly taxed on physical assets or properties such as land, building, cars, business, etc.

3. Sales tax: a tax that is a percent of the price of goods sold in retail stores. It is being paid by the consumers (buyers) of finished goods and services and then, transfered to the appropriate authorities by the seller.

Generally, installment sales are permitted or allowed by the tax laws in a country. Typically, they are recognized in the year of sale for the purpose of financial reporting. Also, installment sales for any goods or services are to be reported in the tax return, at a later time when cash is received from the customer (buyer).

This results in a deferred tax liability because taxable income is lower than financial income in the year of sale, and higher than financial income in later years when collected.

7 0
2 years ago
Tamara has $500 she is looking to save for a class trip. She wants to earn the most possible interest and will not need access t
Olegator [25]
The answer will be (B) money market account
8 0
3 years ago
calculus a hotel that charges 80 oer day for a room gives secial rates to organizations that reserve bewteen 30 adn 60 rooms
Zarrin [17]

Calculus of All rooms are occupied while the lodge costs $eighty per day for a room. For each growth of x bucks within each day room rate, there are x rooms.

Calculus is a branch of mathematics that involves the examination of fees of trade. before calculus turned into invented, all math turned into static: it can most effectively assist in calculating gadgets that have been perfect nevertheless. but the universe is constantly transferring and changing.

Calculus is tough because it's far one of the most difficult and superior types of arithmetic that maximum STEM majors stumble upon. each high faculty and university calculus are a big jump in terms of the issue as compared to the mathematics publications college students have previously taken.

Learn more about Calculus here: brainly.com/question/24430269

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6 0
9 months ago
Brian recently had to have minor surgery that cost him $3,000. He used the $2,300 remaining in his HSA but will pay the rest out
Gala2k [10]

Answer: Brian will have $700 dollars to pay the medical bill balance

Explanation: You already know your total is $3,000. Subtract 3,000 - 2,300, which will give you $700.00

4 0
2 years ago
(1.1: Modeling) Before paying employee bonuses and state and federal taxes, a company earns profits of $103,000. The company pay
yan [13]

Answer:

Amount paid in;

Bonuses to employees = $5,150

State tax = $5,150

Federal tax = $41,200

Explanation:

The bonus paid to employees, federal tax and state tax are all a percentage of the profit made by the company.

The amount of each of these elements may be computed by applying the applicable percentage on the profit made by the company before any of these deductions.

amounts paid in;

bonuses =  5% * $103,000

= $5,150

state tax  =  5% * $103,000

= $5,150

and

federal tax =  40% * $103,000

= $41,200

8 0
2 years ago
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