Bob is a client that has a piece of land that has a fair market value of 9,000,000 that he bought in 1966 for 450,000. In order to explain to Bob about his tax consequences, we should calculate the property disposition capital gain. According to the IRS Publication 434, capital gains is explained as: Capital Gains Basis, adjusted basis, amount realized, fair market value, and amount recognized are defined next. You need to know these definitions to figure your gain or loss. Basis. The cost or
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Low-cost Airline Tax - Model Answer Over recent years there has been an enormous increase in the amount of air traffic around the world resulting in various problems, and a major cause of this has been the growth of low-cost airlines. Although some people believe that taxes should be increased for air travel, I disagree. Those that support taxing airlines believe that this will result in a reduction in this type of travel and thus solve the problems of pollution, noise and construction. This is
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Most people want taxes to be fair. Yet there are strong disagreements over what constitutes tax equity. The concerns result from the different types of taxes and how they affect different groups of people differently. For example, sales taxes proportionally affect the “have-nots” more than the “haves,” the income taxes proportionally affect the “haves” more than other groups and the real estate taxes mostly affect the retired taxpayers. The groups that I identified above would naturally
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FISCAL POLICIES * Is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply. EXAMPLES FROM THE BUDGET * Page 35 where it was recommended that the certain sections in the corporation tax act be revisited to address certain tax leakages.(transfer or sale of assets by between branches and parent companies. The computation
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give some options for your consideration. Your vacation home could be converted into a rental property and you could get $4,500 tax-free. If you charge $150 per night to rent it, the vacation home would have to be used at least 30 days per year to generate the income necessary. However, you can rent the vacation home for 15 days per year this will make the income tax-free. If you use the property for15 days and rent it for 15 days you would receive a yield that would be beneficiary for you. You
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Name Course Professor Date The E.U. Tax Clampdown The European Union has come up with a plan in order to curb deals between the multinational companies and government which are known as sweetheart tax accords. The proposed package that is tailored on tax transparency entails the involvement of European governments in exchanging details concerning tax rulings in order to try and trap “aggressive tax planning”. This plan was in order to have a members’ fiscal policy that will enable the system to a
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hospital to become income tax exempt under Section 501(c)(3) they must ensure that no portion of the hospital or organizations net earnings benefits any individual or private shareholder associated with the organization. When an organization qualifies as a 501(c)(3), the IRS presumes it is a private foundation unless the organization can show it is a public charity. This excludes statutory public charities such as schools and churches. A charity organization can lose tax exempt benefits if found to
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this deduction? What dividends qualify for this deduction? The tax deduction received by a corporation on the dividends paid to it by companies in which it has an ownership stake. Generally Corporation pays taxes on its income before distributing dividends. So if this deduction is not allowed the corporation paying dividend pays taxes, the corporation receiving dividends pays taxes on it again and the shareholders receiving this pays tax again so it leads to triple taxation. U.S. corporations are generally
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Research Problem 1 1. Discuss the different types of interests and the IRS rule related to the deductibility of each type for tax purposes. Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. There are different types of interests, including investment interest, qualified residence interest, student loan interest, and personal interest, which are either deductible or nondeductible. Personal interests are interests on car loans, credit
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C H A P T E R 2 CONCEPTUAL FRAMEWORK FOR FINANCIAL REPORTING LEARNING OBJECTIVES After studying this chapter, you should be able to: •1 •2 •3 •4 Describe the usefulness of a conceptual framework. Describe efforts to construct a conceptual framework. Understand the objective of financial reporting. Identify the qualitative characteristics of accounting information. Define the basic elements of financial statements. •6 •7 Describe the basic assumptions of accounting. Explain the
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