Roberto and Reagan are both 25 percent owners/managers for Bright Light Inc. Roberto runs the retail store in Sacramento, CA, and Reagan runs the retail store in San Francisco, CA. Bright Lingt Inc. generated a $127,800 profit company wide made up of a $75,800 profit from the Sacramento store, a ($27,000) loss from the San Francisco store, and

Q: Coconut, an individual, has a 35% marginal tax rate and owns 100% of the stock of Tropical…

A: The concept of grossing up dividend income refers to the process of increasing the amount of…

Q: Mr. and Mrs. Ruiz operate a hardware store in a jurisdiction that levies both a sales tax on retail…

A: Answer:-  Sales tax meaning:- A sales tax is a fee that consumers must pay to a governing body when…

Q: Coconut, an individual, is the sole shareholder of Tropical Fruit Corporation, a U.S. based…

A: The total amount of taxes owed to taxing authorities, such as the federal, state, or local…

Q: Jane Shay operates a management consulting business. The business has been successful and now…

A: The tax to be paid as individual is as follows: Resultant table:

Q: Richard owns an apartment bu

A: Use Schedule E (Form 1040) to report income or loss from rental real estate, royalties,…

Q: Sandra would like to organize LAB as either an LLC (taxed as a sole proprietorship) or a C…

A: C corporation -A corporation with a legal structure that allows its owners, or shareholders, to be…

Q: Dominique and Terrell are joint owners of a bookstore. The business operates as an S corporation.…

A: Total revenue is the amount earned by the organization during the normal business activities.…

Q: Jeff and Ed form The Tax Museum as an LLC, which will be taxed as a partnership. They each own 50%…

A: Tax is a mandatory financial charge or levy imposed by the government on individuals, businesses, or…

Q: Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave receives $91,000…

A: The current FICA tax rate is 7.65% (i.e. social security tax rate of 6.2% and medicare tax rate of…

Q: Coconut, an individual, is the sole shareholder of Tropical Fruit Corporation, a U.S. based…

A: The tax liability is the total amount of taxes due during a specific period of time to taxing…

Q: Dominique and Terrell are joint owners of a bookstore. The business operates as an S corporation.…

A: Transparency in the financial operations of both people and corporations is ensured by tax…

Q: Roberto and Reagan are both 25 - percent owner or managers for Bright Light Incorporated. Roberto…

A: Profit to be distributed on pro-rata basis = Combined Profit from the Remaining Stores + 30% of…

Q: Sam and Devon agree to go into business together selling college-licensed clothing. According to the…

A: Gain or loss recognized=Contribution value of Inventory-Tax basis value of Inventory

Q: rran operates a boutique yarn store from their own. The store had accounting income after tax of…

A: Taxable income is the income before tax that is available after making standard deductions from the…

Q: During the current year L sold his business and received $440,000 for its related franchise. The…

A: Franchise tax:A franchise tax is a tax paid by certain enterprises that want to do business in some…

Q: Amanda would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C…

A: Tax Tax refers to mandatory obligations on any individual or entity by any government agency. There…

Q: Mr. and Mrs. Lund and their two children (Ben and June) are the four equal partners in LBJ…

A: A partnership firm is one that is formed by two or more persons pooling their resources to start a…

Q: Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively.…

A: Dividend income, both qualified and non-qualified, is reported by taxpayers on their income tax…

Q: Samantha lives under an imputation tax system. Her income tax rate is 30%, which applies to all of…

A: Samantha 's each income is chargeable @ 30% tax rate due to imputation tax…

Q: Roxi owns 500 shares of common stock in the Big Wheeler Corporation. She is pleased to learn that…

A: An investment made in the equity shares of a corporation provides various benefits to the investor…

Q: Sam and Devon agree to go into business together selling college-licensed clothing. According to the…

A: Section 351 is applicable in the given question as Sam is getting 80% of shares in the company.

Q: Wanda is a 20 percent owner of Video Associates, which is treated as a passthrough entity for…

A: Answer:- Income tax meaning:- Income tax is basically a tax that any government imposes on an…

Q: Amanda would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C…

A: Cash Flow Statement- A cash flow statement is a statement setting out the flow of cash under…

Q: Comet Company is owned equally by Pat and his sister Pam, each of whom holds 100 shares in the…

A: Step-by-Step Analysis:Pam's Ownership Before Redemption:Pam owns 100 shares.Her basis per share is…

Q: Kesha, a sole proprietor, is engaged in a cash basis service business. In the current year, she…

A: Tax consequences are occurred as and when real benefits of the transactions are exchanged.…

Q: ividend distributions: (200,000) Required: a. Compute the combined tax cost for Xenon and Ms. Xie.…

A: The Combined Tax Rate is the highest combined federal, state, and local income tax rates applicable…

Q: Albert owns 100% of A Corporation, Betty is the sole proprietor of B Company, and Cai is the sole…

A: The following procedures must be taken into account in order to determine the values of A…

Q: April Ltd. is located in Alberta, a province which does not participate in the HST program and has…

A: Input tax credit refers to the GST paid on purchases and it being eligible for tax deduction. It…

Q: will contribute inventory valued at $146,000 in return for 80 percent of the stoc inventory is…

A: As The Sam received 75 percent  of the  stock so we  divided 75 percentage to get the compensation…

Q: Joel is the sole shareholder of Mantee Corporation, a C corporation. Because Manatee’s sales have…

A: Assuming Joel purchases the warehouse and leases it to the enterprise, he can charge the company the…

Q: John Dufresne purchased 100 shares of Louisiana Power and Light on January 3, 2004 at a total cost…

A: A capital gain occurs when the selling price of an asset, such as stocks or real estate, exceeds its…

Q: Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C…

A: a). i). If SHO organized as LLC :-After tax receipt for Andrea is $ 14007.40.a). ii). If SHO…

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.