Juan, a non-resident Filipino, sold hisstocks in San Gabriel, Inc., adomestic corporation, directly tobuyer and received P200,000 cashplus a car with fair value of P100,000.The car has a depreciated value of90,000 and was previously boughtby the owner for P500,000. Theshares sold by Juan were inherited byhim. The fair value of the stocks atthe time of inheritance was P50,000.The fair value of the stocks at thetime of sale was P90,000. Computethe capital gains tax: *а. Р31,500b. P36,000с. Р37,500d. Not subject to capital gains tax

Tax is a charge on having excess of income than a threshold limit specified by the government.…

Answered: Juan, a non-resident Filipino, sold his…

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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Kesha, a sole proprietor, is engaged in a cash basis service business. In the current year, she incorporates the business to form Kiwi Corporation. She transfers assets with a basis of $500,000 (fair market value of $1,200,000), a bank loan of $450,000 (which Kiwi assumes), and $80,000 in trade payables in return for all of Kiwi’s stock. What are the tax consequences of the incorporation of the business?
Dimas owns a parcel of land worth P5,000,000 which he inherited from hisfather in 2018 when it was worth P3,000,000. His father purchased the propertyin 2007 for P1,000,000. If Dimas transfers this parcel of land to ABCCorporation, in exchange for shares of stock of said corporation worthP4,500,000. The aggregate basis of Dimas for all his ABC Corporation shares is______. a. 3,500,000b. 2,000,000c. 1,000,000d. 3,000,000
Ann and Bob form Robin Corporation. Ann transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $165,000 (basis of $30,000) and for legal services (worth $15,000) in organizing the corporation. ations What gain or income, if any, will the parties recognize on the transfer? b. What basis do Ann and Bob have in the Robin Corporation stock? What is Robin Corporation's basis in the property and services it received from Ann and Bob? a. C.
Jack, an individual calendar-year taxpayer engaged in the following transactions: Purchased 100 shares of Core Co. common stock for $15,000 on December 15, Year 1 Purchased an additional 100 shares of Core Co. common stock for $13,000 on December 30, Year 1 On January 3, Year 2, sold for $10,000 the 100 shares purchased on December 15th Based on these transactions, what amount of loss from the sale of Core's stock is deductible on Jack's Year 1 and Year 2 income tax returns? Year 1 $0; Year 2 $3,000 Year 1 $0; Year 2 $5,000 Year 1 $0; Year 2 $2,000 Year 1 $0; Year 2 $0
Kevin Bacon owns all the stock of Donna Corporation. During the year, Kevin sold a building to Donna for $150,000. The building cost $120,000, its adjusted basis was $94,000, and it was depreciated under the straight-line method. DOnna intends to use the building in its operations. KEvin's tax consequences of the sale are: A) 56,000 dividend income B) $56,000 ordinary income C) $56,000 code sec 1231 gain D) $56,000 long term capital gain
In the current year, Dan, Jay, and Erin form Zeus Corporation. Dan contributes land (a capital asset) having a $75,000 FMV (fair market value) in exchange for 85 shares of Zeus stock. He purchased the land three years ago for $100,000. Jay contributes machinery (Sec. 1231 property purchased four years ago) having a $115,000 adjusted basis and a $45,000 FMV in exchange for 75 shares of Zeus stock. Erin contributes services worth $30,000 in exchange for 10 shares of Zeus stock. A. What is the amount of Dan's recognized gain or loss? b.What is Dan's basis in his Zeus shares? When does his holding period begin? c.What is the amount of Jay's recognized gain or loss? d. What is Jay's basis in his Zeus shares? When does his holding period begin? e.How much income, if any, does Erin recognize? f.What is Erin's basis in her Zeus shares? When does her holding period begin? g. What is Zeus's basis in the land and the machinery? When does its holding period begin? How…
Casey transfers property with a tax basis of $2,180 and a fair market value of $6,100 to a corporation in exchange for stock with a fair market value of $4,500 and $575 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,025 on the property transferred. Casey also incurred selling expenses of $391. What is the amount realized by Casey in the exchange?
In the current year, Mary entered in to the following separate independent transactions: a) Mary sold shares of a public corporation to her husband. The shares, which had a value of $10,000 at the time of the sale, originally cost $4,000. Mary sold them to her husband for $7,000 in cash. During 2020, Mary’s husband received dividends of $500 on these shares. In January 2021, Mary’s husband sold the shares. Assume the couple do not elect out of the 73(1) rollover. b) Mary transferred shares of a public corporation with a fair market value of $8,000 to her RRSP. The shares originally cost $10,000 when first purchased by Mary. Required: (a) Describe the tax consequences, in detail, of these transactions for Mary, and her husband in 2020 and 2021.
Deirdre sold 192 shares of stock to her brother, James, for $5,760. Deirdre purchased the stock several years ago for $7,680. (Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable.) b. What amount of gain or loss does James recognize if he sells the stock for $8,064? Recognized gain or loss
At the time of her death on September 4, Alicia held the following assets: Bonds of Emerald Tool Corporation Stock in Drab Corporation Insurance policy (face amount of $1,456,000) on the life of her brother, Mitch Traditional IRAs Cash surrender value. Fair Market Value The amount included in Alicia's gross estate for these items is $ $3,640,000 4,368,000 * 291,200 1,092,000 Alicia also held a lifetime income interest in a trust (fair market value of trust assets $5,500,000) created by her late spouse Bert. (The executor of Bert's estate had made a QTIP election.) In October, Alicia's estate received an interest payment of $15,000 ($7,500 accrued before September 4) paid by Emerald and a cash dividend of $10,550 from Drab. The Drab dividend was declared on August 19 and was payable to date of record shareholders on September 3. Although Mitch survives Alicia, she is the designated beneficiary of the insurance policy. The IRAs are distributed to Alicia's children.
María and Bob form Robin Corporation. María transfers property worth $420,000 (basis of $150,000) for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $15,000 (basis of $3,000) and for legal services (worth $165,000) in organizing the corporation. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss X of $ a gift X of $ 165,000 ✓. b. What basis do María María has a basis of $ 0 X and Bob recognizes a gain and Bob have in the Robin Corporation stock? 150,000 X, while Bob has a basis of $ 45,000 X in the stock. ✓of $ c. What is Robin Corporation's basis in the property and services it received from María and Bob? Robin Corporation has a basis of $ Bob transferred. 150,000 X in the property María transferred and a basis of $ 15,000 X and has 30,000 X in the property
Niels died with a receivable collectible from Ernest Rutherford. Ernest Rutherford has assets amounting to P400,000, and liabilities amounting to P1,000,000, and included among Ernest's liabilities is an obligation on unpaid taxes payable to the government amounting to P100,000. Neils also mortgaged his property to the bank in consideration for a loan worth P1,000,000. The property is worth P1,500,000. P300,000 of the loan was paid by Niels before her death. In relation to the mortgage, how much may be claimed as a deduction? P700,000 P1,000,000 P1,200,000 P1,500,000

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