Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
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Answer:
A. incentives
Explanation:
An incentive is a motivator to do something. Traditionally incentive is extrinsic, that is there is a reward given when an achievement is made. This is the rational for bonuses on the job. Where an employee is compensated for achieving a milestone at work.
Ultrinsic.com is using incentive of a cash reward for those that get As as a motivator for the students. Students pay an entry fee of $70 and if one student gets an A he will get the whole pool of funds. If more than one person gets an A they will share the money in the pool.
More students will be motivated to get As.
Answer:
$500 short-term capital gain
Explanation:
Henrietta's gain = selling price - stock's basis = $13,500 - $13,000 = $500
Since Henrietta received the stocks on June 1, 2015, and sold them on January 1, 2016, only 7 months had passed, therefore, this transaction would be considered a short term capital gain.
When a gift is sold (in this case the stocks), a taxpayer can use the basis for computing gains. If the stocks were sold at a loss, Henrietta should use the lower value (at the moment of the gift) to determine her loss.