Answer:
a. Steve will not have a capital gain in Year 1 for tax purposes.
Explanation:
Since Steve (the owner of Barb) sold his stocks to an ESOP (employee stock ownership plan), then he will be able to avoid capital gains taxes at least for the first year. ESOPs are qualified retirement plans and when they invest in stocks of the same sponsoring company, the transaction is not taxed if the seller reinvests (buys other stocks). As long as ESOP holds at least 30% of the company's stocks, then Steve can defer his taxes.
A server is required to complete 60 days of training after beginning work.
<h3>Describe employment.</h3>
- Employment is a partnership between two people that governs the delivery of compensated labor services.
- One party, the employer, who may be a company, a not-for-profit organization, a co-operative, or any other entity, pays the other, the employee, in accordance with the terms of a contract in exchange for doing the job that has been allocated to them.
- Employees perform work in exchange for pay, which may be made up of an hourly rate, piecework payments, or an annual salary, depending on the nature of the work performed, the industry conditions in effect, and the bargaining power of the parties.
<h3>What do you mean by training?</h3>
- Training is teaching, or developing in oneself or others, any skills and knowledge or fitness that relate to specific useful competencies.
- Training has specific goals of improving one's capability, capacity, productivity and performance.
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Answer:
c. debit to Payroll Tax Expense for $1,050.
Explanation:
The payroll tax expense includes various expense like - Social security tax payable, medicare tax payable, unemployment tax payable, etc.
So, we consider these items only.
The journal entry is shown below:
Payroll expense A/c Dr XXXXX
To Social security taxes payable A/c XXXXX
To Medicare taxes payable A/c XXXXX
(Being payroll expense is recorded)
All other information which is given is not relevant. Hence, ignored it
Answer:
has less of an effect on aggregate demand than if households view it as permanent
Explanation:
Tax Cut is an expansionary fiscal policy; where government uses its expenditure, receipt policy to increase aggregate demand.
A tax cut affects aggregate demand by increasing it, as it increases the disposable income & purchasing power. However: if households view a tax cut as temporary, it has less impact then that if it is viewed as permanent.
Such because, a tax cut considered temporary would be seen as a temporary increase in disposable income, purchasing power. However, consumers usually weigh marginal utility of a money unit gained less than marginal disutility of a money unit lost. Simply, increasing standard of living is easier, but degrading even temporarily improvised standard of living again is difficult. So, Consumers are averse to reduce their once raisen standard of living . This would make them change their aggregate demand less firstly itself, if the tax cut is considered to be temporary (to avoid disutility of degraded standard of living after tax cut reversal).
