Bart is the favoritenephew of his auntThelma. Thelmatransferred several itemsof value to Bart. For eachof the followingtransactions, determinethe effect on Bart's grossincome. (Leave noanswer blank. Enter zeroif applicable.)Problem 5-66 Part-a (Algo)a. Thelma gave Bart an auto worth$23,500. Thelma purchased the autothree years ago for $18,250.Amount to be included in gross income

Gross income refers to the income which involves the wages, retirement distributions, dividends,…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of thefollowing assets:1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,0002. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’stJanuary 2015 for the amount of $20,0003. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought itsecond hand on 10’th October 2018 for $350.4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August20185. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1,500Advise the Capital Gain Tax Consequences for the above transactions, please have a look at the matrixbelow on how to answer the question
Amy earns an income of 50,000 this year as an employee of rooster enterprises. She pays the following amounts during the year: Contribution to Traditional IRA : 5000 PreTax Cuts and Jobs Act Alimony she paid to her ex husband: 10,000 Medical expenses: 6000 What is Amy's Adjusted Gross Income? (AGI) a. 29000 b. 34000 c. 35000 d. 39000
Ralph made the following business gifts during the year To Robert (a key client) at Christmas: $50 To Angel (Robert’s 8-year old daughter) on her birthday: $20 To Art (Ralph’s secretary) on his birthday ($3 was for gift wrapping): $30 To Paige (Ralph’s boss) at Christmas: $40 Presuming proper substantiation, Ralph’s deduction is: A. $0 B. $53 C. $73 D. $78
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This year, Leron and Sheena sold their home for $1,036,000 after all selling costs. Under the following scenarios, how much taxable gain does the home sale generate for Leron and Sheena? Assume that the couple is married filing jointly. (Leave no answer blank. Enter zero if applicable.) Problem 5-81 Part-a (Algo) a. Leron and Sheena bought the home three years ago for $185,000 and lived in the home until it sold.
.LO.2 On July 1, 2016, Rex purchases a new automobile for $40,000. He uses the car 80% for business and drives the car as follows: 8,000 miles in 2016, 19,000 miles in 2017, 20,000 miles in 2018, and 15,000 miles in 2019. Determine Rex's basis in the business portion of the auto as of January 1, 2020, under the following assumptions: a. Rex uses the automatic mileage method. b. Rex uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used-see Chapter 8. The recovery limitation for an auto placed in service in 2016 is as follows: $3,160 (first year), $5,100 (second year), $3,050 (third year), and $1,875 (fourth year).]
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