Rosie Malone sold her house to D.M. Band. The contract was signed on June 1, 2023, and closing was set for June25, 2023. Rosie had prepaid her three-year pest and termite protection policy in the amount of $1,825 on April1, 2022, and D.M. agreed to assume it at closing. Water and sewer are paid the first of each month for the previousmonth. They are estimated to total $200 for June. D.M. also agrees to assume Rosie's mortgage, which will have abalance of $85, 385 on date of closing. Monthly payments are $569.23, with interest for June of $204.62, payable onthe first of the month for the previous month. The seller is responsible for the day of closing. Required: How would thepest and termite protection premium be prorated? Note: Round intermediate calculations to 3 decimal places and yourfinal answers to 2 de

Mortgage is an agreement between two parties to lend a loan on the basis of a certain property kept…

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CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter12: Nonrecognition Transactions

Section: Chapter Questions

Problem 36P

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Hassad owns a rental house on Lake Tahoe. He uses a real estate firm to screen prospective renters, but he makes the final decision on all rentals. He also is responsible for setting the weekly rental price of the house. During the current year, the house rents for 1,500 per week. Hassad pays a commission of 150 and a cleaning fee of 75 for each week the property is rented. During the current year, he incurs the following additional expenses related to the property: a. What is the proper tax treatment if Hassad rents the house for only 1 week (7 days) and uses it 50 days for personal purposes? b. What is the proper tax treatment if Hassad rents the house for 8 weeks (56 days) and uses it 44 days for personal purposes? c. What is the proper tax treatment if Hassad rents the house for 25 weeks (175 days) and uses it 15 days for personal purposes?
Rosie Malone sold her house to D.M. Band. The contract was signed on June 1, 2023, and closing was set for June 25, 2023. Rosie had prepaid her three-year pest and termite protection policy in the amount of $1,825 on April 1, 2022, and D.M. agreed to assume it at closing. Water and sewer are paid the first of each month for the previous month. They are estimated to total $200 for June. D.M. also agrees to assume Rosie's mortgage, which will have a balance of $85,385 on date of closing. Monthly payments are $569.23, with interest for June of $204.62, payable on the first of the month for the previous month. The seller is responsible for the day of closing. Required: How would the pest and termite protection premium be prorated? Note: Round intermediate calculations to 3 decimal places and your final answers to 2 decimal places. Seller's portion of pest and termite protection Buyer's portion of pest and termite protection $ $ Amounts 38.40 9.60
Vinubhai
Denger
Merville is a dealer in real properties. Merville requires 20% downpayment, and the balance is payable over 36 monthly instalments starting on the last day of the month following the month of sale. Merville sold properties in 2019 and 2020 with terms as follows: House and Lot No. 1 was sold for P1,350,000 on November 11, 2019. House and Lot No. 2 was sold for P1,800,000 on July 5, 2020. Both properties were sold at a gross profit rate of 40% based on the selling price. Compute Merville’s gross income subject to income tax in 2019 and 2020, respectively. P120,000;P720,000 P540,000;P720,000 P120,000;P846,000 P540,000;P846,000
In 2023, Mr. Sam Warren is provided with an automobile that is leased by his employer. The monthly lease payment is $791 per month which includes $91 in HST. During the year, the car was available to Mr. Warren for a total of 310 days. During this period, he drives the car a total of 40,000 kilometers, 22, 000 of which are for employment purposes and 18,000 for personal use. Calculate Mr. Warren's minimum taxable automobile benefit.
None
On 1 July 2019 Richard bought a rental property for $920,000. He borrowed $630,000 on the same day from the bank to buy the property. The term of the loan was 4 years. The property was leased on 1 July 2019. He received rent in cash from his tenants during the year ended 30 June 2020 in the amount of $95,000. Included in this amount was a payment of $11,000 on 28 June 2020 as rent for the month of July 2020. He also received $80,000 in wages working for a Real Estate company. He has no deductions apart from interest on the loan of $24,000 for the year ended 30 June 2020. Required: Explain the relevant legal provisions and calculate Richard’s income tax for the year ended 30 June 2020.
On January 1, 2023, Mr. Packard receives a $135,000 loan from his employer to assist him in purchasing a home. The loan requires annual interest at a rate of 3.1%, which he pays on December 31, 2023. Assume that the relevant prescribed rate is 5% during the first quarter of 2023, 6% during the second quarter, and 4%. What is the amount that Mr. Packard's is required to add to his 2023 employment income as a result of the employee loan?
During 2021 Jean underwent the following transactions: $100,000 for pain and suffering and $20,000 in punitive damages related to a workplace injury she suffered in 2020. Received 12 payments from an annuity in the amount of $3,000 a month for a total of $36,000. She originally purchased the annuity contract for $200,000 and began receiving payments when she turned 60 years old. Won a car with a fair market value of $30,000. Required: How much did Jean’s 2021 gross income increase as a result of the above transactions?
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.
Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2021, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2021, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2021. The closing statement showed the following disbursements: Real estate agent's commission $21,780 Appraisal fee 600 Exterminator's certificate 300 Recording fees 800 Mortgage to First Bank 305,000 Cash to seller 34,520 Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2021, Wesley purchases another residence for $325,000. If an amount is zero, enter "0". a. Calculate Wesley's recognized gain on the sale. b. What is Wesley's adjusted basis for the new residence? c. Assume instead that the selling price is $800,000. What is Wesley's recognized gain? His adjusted basis for the new residence?…

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