Paolo started his own, and only, business as a sole trader in 2000 and has decided to sell it to Leo in the tax year 2020/21. He realised following gains/losses) Factory £255,000 Goodwill £130,000 Warehouse (£75,000) Investment property (currently let) £170,000 All the assets have been held by Paolo for many years. He has no other gains or losses in the tax year 2020/21 but has capital losses brought forward of £13,000. His only other income for the year is trading profit of £35,000. Required: Calculate the amount of CGT payable by Paolo on the sale of his business claiming all relevant reliefs.

Paolo started his own, and only, business as a sole trader in 2000 and has decided to sell it to Leo in the tax year 2020/21. He realised following gains/losses) Factory £255,000 Goodwill £130,000 Warehouse (£75,000) Investment property (currently let) £170,000 All the assets have been held by Paolo for many years. He has no other gains or losses in the tax year 2020/21 but has capital losses brought forward of £13,000. His only other income for the year is trading profit of £35,000. Required: Calculate the amount of CGT payable by Paolo on the sale of his business claiming all relevant reliefs.

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

Jennifer transferred land with an adjusted basis of $15,000 and a fair market value of $25,000 to ABC Corporation in return for all of its stock. Jennifer also received a $1,000 short-term note (boot). Please calculate the following for Jennifer. You must show your all of your work. 1) Her realized gain 2) Her recognized gain 3) Her basis in the stock 4) Her basis in the note
Noah Yobs, who has $75,400 of AGI (solely from wages) before considering rental activities, has $67,860 of losses from a real estate rental activity in which he actively participates. He also actively participates in another real estate rental activity from which he has $37,700 of income. He has other passive activity income of $24,128.a. What amount of rental loss can Noah use to offset active or portfolio income in the current year?$b. Complete Noah's Form 1040 (page 1) for the current year. Use the minus sign to indicate a loss.
Auntie sold some stock she purchased several years ago for $10,000 to Niece for $6,000. I. If this is Auntie's only stock transaction, she can deduct only $3,000 of the loss. II. If Niece sells the stock for $10,000, her taxable gain is $4,000. What is correct?
Jim, a US individual, purchases a certain rental real estate property in 2014 and leases it out producing a taxable loss of ($10,000) each year from 2014-2017. Jim has no other sources of income during any of these years. Jim sells the real estate in 2017 recognizing only a $30,000 gain on the sale. How much income (loss) does Jim report on his tax return in each of the tax years? If Jim is a real estate professional: 2014 2015 2016 If Jim is a not real estate professional: 2014 2015 2016
Shezan made a gross chargeable lifetime transfer of £305,000 in January 2014. He also transferred £1,900 to his friend Stevenson in January 2018. In August 2018, he makes a transfer of £390,000 to a trust for the benefit of his grandchildren. The trustees (donee) pay the tax arising from the gift. How much lifetime inheritance tax will be payable in respect of his gift of £390,000? Shezan has not paid any tax on the gift made in January 2018 since it was covered by the annual exemption for the tax year 2017/18.
Explain why the loss resulting from the sale of a computer in the following three situations is treated differently for income tax purposes:a. Monica sells her personal computer at a loss of $1,300. None of the loss is deductible.b. Omar sells a computer used in his carpeting business at a loss of $4,300. The loss is fully deductible.c. Jerry sells his computer at a loss of $3,800. Jerry used the computer to keep track of his investment portfolio. Only $3,000 of the loss is deductible.
Josh has investments in two activities, these are his only two investments. Josh materially participates in Activity A (acquired three years ago). Activity A has $10.000 basis at the beginning of the year and produces a loss of $30,000 this year. Activity B is a passive activity for Josh. Activity B (acquired two years ago) has an $80,000 basis at the beginning of the year and produces a loss of $50,000. Neither activity is a publicly traded partnership. Josh has $100,000 of wage income. What is the total amount of Josh's suspended losses for the year? (enter whole dollars only, no minus sign (-) no dollar signs ($). no commas (.), or any other marks.)
Noah Yobs, who has $97,000 of AGI (solely from wages) before considering rental activities, has $87,300 of losses from a real estate rental activity in which he actively participates. He also actively participates in another real estate rental activity from which he has $48,500 of income. He has other passive activity income of $31,040. a. What amount of rental loss can Noah use to offset active or portfolio income in the current year? b. Compute Noah’s AGI on Form 1040 [pages 1 and 2; also complete Schedule 1 (Form 1040)] for the current year. Use the minus sign to indicate a loss. What amounts should go on lines 1, 6, & 7 on page 2 of FORM 1040? What amount s go on lines 17, & 22 on schedule one of FORM 1040?
Christ owns a factory building that he has used in his business for many years. On 1/28/20, the factory was totally destroyed in a fire. Christ received $ 5,000,000 from his insurance company for this total loss. At the time of this loss, Christ had an adjusted basis in this factory of $ 2,000,000 ($ 3,000,000 original cost less $ 1,000,000 in accumulated straight-line tax depreciation). Christ replaced the factory at a cost of $ 4,800,000 in November of 2020. Calculate Christ’s 2020 realized gain of loss from the above How much gain or loss will Christ recognize for tax purposes in 2020? How much additional federal tax will Christ incur in 2020 assuming his marginal ordinary income tax rate is 37% and his net capital gain rate is 20%? What is Christ’s tax basis in the replacement factory building?
Sarah operates a printing business in Sydney. On 1 July 2018 she bought a new printing press for $200,000. The press was used 100% for business purposes and has an Effective Life of 8 years. Sarah opted to use the PCM to calculate depreciation. On 5 July 2020, Sarah sold the printing press. Required: Calculate the Balancing Adjustment and discuss the tax consequences if Sarah sold the press for: (a) $200,000 (b) $149,657.53 (c) $100,000
Please do not give solution in image format ?
In 2006, Douglas purchased an office building for $500,000 to be used in his business. He sells the building in the current tax year. Explain whether his recognized gain or loss for regular income tax purposes will be different from his recognized gain or loss for AMT purposes.