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Business Accounting TAXATION INDIVIDUALS & BUSINESS ENTITIE

The income is a direct tax which is charged by the government of the country to the income of the individuals, organizations, and companies. The income tax rates are predefined and is charged accordingly. To determine: The amount that person P will realize on sale. Asking price of the warehouse = $450,000 Mortgage on the warehouse = $125,000 Person W is offering to pay $325,000 cash and is assuming the full responsibility to pay the mortgage. Amount realize by person P on the offer of person W is calculated as follows: Amount realize = cash payment + mortgage = $325,000 + $125,000 =$450,000 Explanation: When any property that is being disposed off has some liability and the buyer of the property takes the responsibility of paying the liability then in such case the relief of debt increases the amount realized. Here, in the given case, person W assumes the mortgage payment and therefore, the realize amount for person P will include the cash payment by person W plus the mortgage amount.

The income is a direct tax which is charged by the government of the country to the income of the individuals, organizations, and companies. The income tax rates are predefined and is charged accordingly. To determine: The amount that person P will realize on sale. Asking price of the warehouse = $450,000 Mortgage on the warehouse = $125,000 Person W is offering to pay $325,000 cash and is assuming the full responsibility to pay the mortgage. Amount realize by person P on the offer of person W is calculated as follows: Amount realize = cash payment + mortgage = $325,000 + $125,000 =$450,000 Explanation: When any property that is being disposed off has some liability and the buyer of the property takes the responsibility of paying the liability then in such case the relief of debt increases the amount realized. Here, in the given case, person W assumes the mortgage payment and therefore, the realize amount for person P will include the cash payment by person W plus the mortgage amount.

Solution Summary: The author explains that income is a direct tax which is charged by the government of the country to the income of individuals, organizations, and companies.

TAXATION INDIVIDUALS & BUSINESS ENTITIE

TAXATION INDIVIDUALS & BUSINESS ENTITIE

10th Edition

ISBN: 9781260799705

Author: SPILKER

Publisher: MCG

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Chapter 11 Solutions

TAXATION INDIVIDUALS & BUSINESS ENTITIE

Ch. 11 - Compare and contrast different ways in which a...Ch. 11 - Prob. 2DQ Ch. 11 - Prob. 33P Ch. 11 - Prob. 41P Ch. 11 - Prob. 50P Ch. 11 - Bourne Guitars, a corporation, reported a 157,000...Ch. 11 - Tonya Jefferson (single), a sole proprietor, runs...Ch. 11 - Prob. 53P Ch. 11 - Prob. 63P

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