Malcolm Woodchip, a furniture salesman, commences business on his own on 1 April of the current income year. He purchases an existing business and is granted a lease of showrooms. Malcolm paid $600 to a mortgage broker to obtain a loan of $15,000 to pay the premium for the lease at 18% for the 6-year period. How much of the broker fee would Malcolm be able to claim as a deduction? O $0 O 600/2190 = 0.27 x 91 = $25 600/1825 0.33 x 91 = $30 O $600 =

Malcolm Woodchip, a furniture salesman, commences business on his own on 1 April of the current income year. He purchases an existing business and is granted a lease of showrooms. Malcolm paid $600 to a mortgage broker to obtain a loan of $15,000 to pay the premium for the lease at 18% for the 6-year period. How much of the broker fee would Malcolm be able to claim as a deduction? O $0 O 600/2190 = 0.27 x 91 = $25 600/1825 0.33 x 91 = $30 O $600 =

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Assume that the prescribed rate for each quarter last year was 4%. Gerry received a loan from his employer of $60,000 at 2%, which he put towards a rental property he purchased for $120,000. He paid the balance in cash. What was his taxable benefit last year as a result of the loan that he obtained from his employer? a) $0 b) $600 c) $1,200 d) $2,400 Alan Peterson made a $2,000 RRSP contribution this year, and his marginal tax rate is 29%. Next year, Alan expects to get a significant raise, such that his marginal tax rate will increase to 43%. The Income Tax Act allows him to deduct his RRSP contribution this year, or to carry the deduction forward to future years. When should he claim the deduction to optimize the tax benefits? a) He should claim the deduction this year. b) He should claim the deduction next year. c) It does not matter when he claims the deduction because it will result in the same tax reduction in either year. d) He should split the deduction between his tax returns…
Noel purchases a house and gets a 15-year mortgage for $155,000 at 4.75% APR. In addition to the monthly payment, the lender requires him to pay into an escrow account for the homeowners insurance and property tax. His homeowners insurance is $1100 per year and the property tax is $1500 per year. Determine the monthly payment to the lender that includes the insurance and property tax. Round your answer to the nearest cent.
Felix is purchasing a brownstone townhouse for $2,900,000. To obtain the mortgage, Felix is required to make a 19% down payment. Felix obtains a 30-year mortgage with an interest rate of 5.5%. Click the icon to view the table of monthly payments. a) Determine the amount of the required down payment. b) Determine the amount of the mortgage. c) Determine the monthly payment for principal and interest. a) Determine the amount of the required down payment. S b) Determine the amount of the mortgage. c) Determine the monthly payment for principal and interest. (Round to the nearest cent.) (...) 4
Matthew purchased his first home in 2021 and the bank required that he pay mortgage insurance premiums of $3,040 which was 1% of his loan of $304,000. Matthew's AGI for 2021 was $106,500. What is Matthew's deduction in 2021 for mortgage insurance premiums? Mortgage insurance premium LA $
Kari is purchasing a home for $220,000. The down payment is 25% and the balance will be financed with a 15 year mortgage at 8% and 3 discount points. Kari made a deposit of $30,000 (applied to the down payment) when the sales contract was signed. Kari also has these expenses: credit report, $70; appraisal fee, $120; title insurance premium, 1% of amount financed; title search, $200; and attorney's fees, $500. Find the closing costs (in $).
Brad operates a storage business on the accrual method. On July 1, Brad paid $48,000 for rent on his storage warehouse and $18,000 for Insurance on the contents of the warehouse. The rent and Insurance cover the next 12 months. What Is Brad's deduction for the rent and Insurance? Multiple Choice O O O O O $48,000 for the rent and $18,000 for the Insurance $24,000 for the rent and $18,000 for the Insurance $24,000 for the rent and $9,000 for the insurance $48,000 for the rent and $9,000 for the insurance None of the choices are correct.
Rex rents out his vacation home for 10 months and lives in his vacation home for the remainder of the year. His gross rental income for 2020 is $8,600. The expenses attributable to the vacation home for the entire year are as follows: Real estate taxes $2,500 Interest on mortgage loan 3,800 Utilities 1,000 Repairs/maintenance 800 Depreciation 3,500 What amount would Rex report as net income or loss from the rental of the vacation home?
Jan sold her house on December 31 and took a $45,000 mortgage as part of the payment. The 10-year mortgage has a 10% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year. a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent. $ b. How much interest was included in the first payment? Round your answer to the nearest cent. $ How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent. $ How do these values change for the second payment? I. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases. II. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal…
Kari is purchasing a home for $220,000. The down payment is 25% and the balance will be financed with a 15 year mortgage at 8% and 3 discount points. Kari made a deposit of $30,000 (applied to the down payment) when the sales contract was signed. Kari also has these expenses: credit report, $90; appraisal fee, $110; title insurance premium, 1% of amount financed; title search, $300; and attorney's fees, $500. Find the closing costs (in $).
Kay, who is not a real estate dealer, sold an apartment house to Polly during the current year (2019). The closing statement for the sale is as follows. Total selling price $ 190,000 Add: Polly’s share of property taxes (six months) paid by Kay 3,000 Less: Kay’s 8% mortgage assumed by Polly $55,000 Polly’s refundable binder (“earnest money”) paid in 2018 1,000 Polly’s 8% installment note given to Kay 99,000 Kay’s real estate commissions and attorney’s fees 8,000 (163,000) Cash paid to Kay at closing $ 30,000 Cash due from Polly $30,000 + $8,000 expenses $ 38,000 During 2019, Kay collected $9,000 in principal on the installment note and $2,000 of interest.…
Tabitha sells real estate on March 2 of the current year for $305,200. The buyer, Ramona, pays the real estate taxes of $15,260 for the calendar year, which is the real estate property tax year. Round any division to four decimal places and use in subsequent calculations. Round your final answers to the nearest dollar. Assume a 365-day year. a. Determine the real estate taxes apportioned to and deductible by the seller, Tabitha, and the amount of taxes deductible by Ramona. Tabitha: Ramona: $ b. Calculate Ramona's basis in the property and the amount realized by Tabitha from the sale. Tabitha: $ Ramona: $
On July 1 of year 1, Elaine purchased a new home for $430,000. At the time of the purchase, it was estimated that the property tax bill on the home for the year would be $8,600 ($430,000 * 2%). On the settlement statement, Elaine was charged $4,300 for the year in property taxes and the seller was charged $4,300. On December 31, year 1 Elaine discovered that the real property taxes on the home for the year were actually $9,600. Elaine wrote a $9,600 check to the local government to pay the taxes for that calendar year (Elaine was liable for the taxes because she owned the property when they became due). what amount of real property taxes is Elaine allowed to deduct for year 1? (Assume not married filing separately.) Multiple Choice ___ $0 ___ $4,300. ___ $4,800. ___ $5.300.