You signed a contract 5 years ago to sell all the timber on your land for $500,000. You cut your timber this year. You have a total tax basis of $120,000 in the timber. On Jan 1 FMV for timber is $450,000. How much of the gain is considered ordinary income?
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- In the current tax year, a taxpayer sells a painting for $12,000. She purchased the painting two years ago for $8,000. The short-term capital gains rate is 25%. The long-term capital gains rate is 15%. What is the taxpayer's gain for the current tax year? O $600 short-term capital gain. O $600 long-term capital gain. O $1,000 long-term capital gain. O$1,000 short-term capital gain An individual with a taxable income of $50,000 sells 300 shares of stock at a market price of $100 per share. At the individual's present level of income, there is a marginal ordinary income tax rate of 25% and a long-term capital gains rate of 15%. 200 shares of the stock were acquired 13 months earlier at a price of $80 per share, and 100 shares were acquired two years earlier at a price of $60 per share. What is this individual's tax liability after this transaction? O $2,000 O $1,800 O $8,000 O $1,200At the beginning of the year, Mr. Lanier put $50,000 cash into Investment X. At the end of the year, he received a check for $2,800, representing his annual return on the investment. Mr. Lanier’s marginal tax rate on ordinary income is 37 percent. However, his return on Investment X is a capital gain taxed at 20 percent. At the beginning of the year, Mr. Lanier could have invested his $50,000 in Business Z with an 8 percent annual return. However, this return would have been ordinary income rather than capital gain. Required: Considering the fact that Mr. Lanier could have invested in Business Z, how much implicit tax did he pay with respect to Investment X? Did Mr. Lanier make the correct decision by putting his $50,000 into Investment X instead of Business Z?The tax on $2,600 of profit on a capital asset is deferred. A person in a 40 percent tax bracket will have to pay what amount of taxes when the asset is sold? (Round your answer to the nearest whole number.)
- Deon made $30.000 in taxable income last year. Suppose the income tax rate is 15% for the first $8500 plus 17% for the amount over $8500. How much must Deon pay in income tax for last year?Ella bought a residential investment property in Cleveland for $200,000. Five years later she spent $250,000 on renovations and then sold the property for $1,200,000. The tax code required Ella to pay a capital gain tax of 15% on her net profit (net profit = sale price - purchase price - renovation costs). If the inflation rate for the past 5 years has been 5% annually, compute the after-tax real rate of return on Ella's investment. Choose your final answer from below while still showing your work. A. 33.17% B. 28.13% C. 26.83% D. 31.84%Mrs. Oliver is negotiating to purchase a tract of land from DC Company, a calendar year taxpayer. DC bought this land six years ago for $480,000. According to a recent appraisal, the land is worth $800,000 in the current real estate market. According to DC’s director of tax, the company’s profit on the sale will be taxed at 35 percent if the sale occurs this year. However, this tax rate will definitely decrease to 21 percent if the sale occurs next year. Mrs. Oliver is aware that DC would prefer the sale close next year. However, Mrs. Oliver needs the land immediately to begin construction of a new retail outlet. She offers to pay $875,000 for the land with the stipulation that the sale close by December 31. Required: Calculate the amount of after-tax cash for the each of the following alternatives. Alternative 2: If DC sells the land to Mrs. Oliver next year. Profit on sale Tax cost Cash proceeds from sale Tax cost After-tax cash
- Samuel Jenkins made two investments; the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $10,000 on each. If Samuel is single and has taxable income of $40,000, what will be the amount of capital gains tax on each investment? See Capital Gains table and Taxable income rate table. Investment 1: held 13 months: whats the capital gains tax? Investment 2: held 2 months: Whats the capital gains tax?am. 02.On August 15, 2021, Ms. Mones sold a 500-square meter residential house and lot for P3,000,000. The house was acquired in 2006 at P2,000,000. The Assessor's fair market values of the house and lot, respectively, wer P1,500,000 and P1,000,000. The zonal value of the lot was P5,000 per square meter. What is the capital gains tax? a.P150,000 b.P240,000 c.P180,000 d.P120,000
- At the start of the year, Josh has assets worth $500,000. He has debts worth $350,000. Over the year, he earns $200,000 of which he pays $50,000 in tax. He spends $50,000 on goods and services. He pays interest on his debt at 10% of $350,000. He pays off $30,000 of his debts.His assets go up in value by $25,000. What is his net worth at the end of year.Four years ago, a self-employed taxpayer purchased office furniture for $30,000. During the current tax year, the taxpayer sold the furniture for $37,000. At the time of the sale, the taxpayer's depreciation deductions totaled $20,700. What part of the gain is taxed as long-term capital gain? A. $0 O B. $7,000 C. $20,700 D. $27,700Brittany purchased an industrial lot in Sudbury for $1,100,000 and it was assessed at 65% of its purchase price. The annual property tax on the lot is 25 mills. a. Calculate the assessed value of the lot. Round to the nearest cent b. Calculate the property tax she would have to pay every year. Round to the nearest cent
