Sale of real estate is subject to VAT. True, if not made in the regular course of trade or business False, it is exempt if the real estate is classified as capital asset False, it is exempt if what is sold is a resi¬dential unit True, if the real estate is classified as capital asset

Sale of real estate is subject to VAT. True, if not made in the regular course of trade or business False, it is exempt if the real estate is classified as capital asset False, it is exempt if what is sold is a resi¬dential unit True, if the real estate is classified as capital asset

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Under IFRS, a loss from the destruction of property in a fi re would most likely be classifi ed as:…

A: When a gain or loss occurs due to a infrequent event and which are unusual in nature, then such gain…

Q: Generally, how will a suspended loss attributable to a passive activity that is transferred by…

A: When a taxpayer dies, the treatment of suspended losses attributable to a passive activity depends…

Q: For purposes of computing the phase out of the special deduction for active participation in a…

A: Step 1 Passive loss carryover occurs until and unless there are enough passive income by which to…

Q: A grantor is disallowed from doing which of the following in a grantor trust? Avoiding taxation…

A: A trust that is referred to as a "grantor trust" is one in which the person who creates and funds…

Q: Recognition of sales of property at a gain may be disallowed under the related party rules of the…

A: We would answer this question as per the Internal Revenue Code (IRC)

Q: Confusingly, §1221 defines what is not a capital asset. True False

A: Capital Assets:All property that taxpayers own is capital asset, unless it falls into one of the…

Q: Which of the following statements about a business combination is valid?

A: Answer: b.The acquirer should recognize the acquiree’s contingent liabilities if certain conditions…

Q: Which of the following "is not" a criteria that must be met to deduct business and/or investment…

A: When it comes to determining the deduction of expenses allowed to the taxpayer, there are various…

Q: What happens when a qualified exempt importer subsequently sells what was imported to a taxable…

A: when a qualified exempt importer subsequently sells to non exempt person, the purchaser shall be…

Q: Which statement is not correct? a. Related-party income is taxable b. Related-party losses are…

A: The correct answer is given in the following steps for your reference.

Q: What is the net effect of the foreclosing entries on the balance of the owner's capital account?

A: Owner’s capital account is the one that shows the net amount that the owner has invested in the…

Q: Which of the following is deductible from gross income? O Loss from a business receivable from a…

A: Gross income : It is the income which is taxable before allowing any deductions. Deduction are…

Q: Ordinary and necessary trade or business expenses used to generate tax-exempt income would be…

A: Deductible business expenses are expenses that a business incurs in order to earn income or conduct…

Q: Why allow the fair value option for financial assets and liabilities and not for, say, buildings or…

Q: Which of the following is not a “tax status” for an asset? Capital loss asset. Capital asset.…

A: Capital Assets:All property that taxpayers own is capital asset, unless it falls into one of the…

Q: When a taxpayer sells an asset, what is the difference between realized and regonized gain or loss…

A: Difference between complete and recognized gains and losses Realized gains or losses for the…

Q: No deductions shall be allowed where the transaction is between “related taxpayers” under Sec. 36(B)…

A: Solution Concept As per the provision of the Tax Code The interest expense in not allowed for…

Q: Transfers from investment property to property, plant and equipment are appropriate a. The…

A: Investment property is the class of asset which is used for the rental or dividend income,…

Q: A taxpayer who acquired property in a related party transaction where a loss is realized cannot use…

A: Related-party transaction refers to those transactions that reflects a deal or arrangement made…

Q: STATE TRUE OR FALSE A) The frequency of transactions involving the type of property would be just…

A: Answer are as follows.

Q: Step by step solutions

A: Step 1: Understand the Question: The question asks about the consequence if an exemption filed in…

Q: True or False Any net income obtained from selling a depreciated property according to its last…

A: Fixed assets are those assets which are held by the business for longer period of time. Depreciation…

Q: Situs of taxation is the place of taxation. Which of the statement is not true about situs?

A: Answer: Situs of taxation is place of taxation. a. Situs of persons is the residence of the…

Q: This transfer of financial asset does not result to derecognition. A. The transferred asset has…

A: Assets: Assets are resources (property) presented in the balance sheet because for it an…

Q: Which of the following is not considered a type of compensatory damages? O Unjust enrichment Extra…

A: Unjust enrichment is not considered a type of compensatory damages. Compensatory damages aim to…

Q: Which of the following is not deductible from business income? Group of answer choices Casual…

A: Business income is earned revenue that includes all money generated by an entity's operations.…

Q: The rules on holding period shall only apply where the taxpayer is an individual and the dealing…

A: Holding Period:-It is a period that helps in determining the taxing of capital gain or losses. A…

Q: The tax treatments of assets affects the risk structure of assets True False

A: The composition of a company's asset helped in determining how the balance of long-term credits and…

Q: True (t) or False (f) ______ The IRS does not require the taxpayer to use the same depreciation…

A: Due to various reasons such as normal wear & tear, obsolescence, change in technology, etc., the…

Q: Te election to expenses is not permitted where listed property does not meet the qualified business…

A: Qualified business use refers to any use of the asset in the taxpayer’s trade or business which is…

Q: Which is incorrect statement regarding the taxability or deductibility of gains or losses in…

A: Tax is a liability calculated on the income earned and paid to the government that acts as revenue…

Q: Nhere the seller fails to perform altogether by refusing to convey title, damages may include:…

A: A contract means the agreement among two or more parties that are enforceable by law. In case of…

Q: Which of the following items is not charged against the income of an estate? a. Ordinary repairs…

A: Lets understand the basics. As per basics accounting rules, expense should be charged against the…

Q: Sale transactions between the home office and its branch are taxable because the home office and the…

A: A branch office consists of smaller divisions of different aspects of the company and therefore a…

Q: Rationale for nonrecognition includes which of the following? I. A refinement of the realization…

A: Non-recognition of an event and transaction in the current year depends on various circumstances…

Q: What elements must be present for an amount to constitute ordinary income under s 6-5 of ITAA 1997?…

A: Section 6-5 of the ITAA 1997 shows that your assessable income includes income as stated to ordinary…

Q: Explain the exclusion for gain on sale of personal residence. Does that exclusion apply to d sale…

A: Tax refers to the amount that is charged by the government on the income and gain earned by the…

Q: Why might it be more advantageous for a taxpayer to demonstrate that they ... Why might it be more…

A: The correct answer for the above motioned question is given in the following steps.

Q: What items are excluded from the statutory definition of Capital Asset? Why?

A: Capital assets are assets which may or may not connect with the business and include all tangible or…

Q: None

A: The related-party loss limitation is a tax provision designed to prevent abuse and manipulation of…

Q: The purpose of Sec. 1245 is to eliminate the advantage taxpayers would have if they were able to…

A: Sec. 1245 and Sec . 1231 are sections of U.S. Internal Revenue Code.

Q: When an investment ceases to be an associate, the fair value of the investment at the date when it…

A: Investment is the amount saved by the investor in order to earn regular income as well as get the…

Q: TRUE OR FALSE Illegal expenses

A: Illegal expenses incurred in operating a legitimate business are deductible from gross income…

Question

Sale of real estate is subject to VAT.

True, if not made in the regular course of trade or business

False, it is exempt if the real estate is classified as capital asset

False, it is exempt if what is sold is a resi¬dential unit

True, if the real estate is classified as capital asset

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

6. There is no taxable income until such income is recognized. Taxable income is recognized when the (BEQ) a. taxpayer fails to include the income in his income tax retum. b. income has been actually received in money or its equivalent. income has been received, either actually or constructively. d. transaction that is the source of the income is consummated. CS Scanned with CamScanner
1 Under Section 1031 a personal residence or an automobile used solely for personal purposes will qualify for a tax free exchange. T/F perty cannot be used by dealers in real property. T/F
true or false capital gains on a principal residence are never taxable.
Which of the following is the proper tax treatment of a loss that is realized on an involuntary conversion business property? The loss is never recognized, the loss is categorized as a short-term capital loss, the loss is recognized or the loss is recognized on the involuntary conversion of real estate, but not on the involuntary conversion of personal property
For tax purposes, one of the requirements to recognize income is: A) The transaction does not have to be completed. B) The income cannot be tax-exempt. OC) The transaction does not have to have an economic benefit. J D) None of these.
Assets received in donation should Obe expensed upon receipt. O should not be depreciated. O be depreciated based on their fair value at the time of the donation. O be depreciated based on the their book value at the time of the donation.
Why might the decision to own rather than lease real estate have an unfavorable effect on the corporation’s financial statements?
Which is not charged against the income of an estate? 1 Ordinary repairs to income-producing property 2 Expenses incurred to protect income flow 3 Loss on the sale of an estate asset 4 All of the above are charged against the income
With respect to transaction and translation gains and losses: a. transaction gains and losses are taxable but have no immediate cash flow impact. b. transaction gains and losses have immediate cash flow and tax consequences, translation gains and losses have neither. c. transaction gains and losses have an immediate cash flow impact, but taxation is deferred until the related assets are sold. d. transaction and translation gains are taxable, but only transaction losses are tax deductible.
Which of the following is accurate regarding a real estate foreclosure transaction? A A foreclosure transaction can never involve recourse debt. B A foreclosure transaction can never involve nonrecoursedebt. C A foreclosure transaction has no federal income taxconsequences for the borrower. D A foreclosure transaction can have significant federalincome tax consequences for the borrower.
Operating loss carryforward occurs when an entity has a negative taxable income. Required: True or False
Why in franchise arrangements may it be improper torecognize the entire franchise fee as revenue at the dateof sale?