There is no current year deduction for these expenses since they were already deducted for taxes in the previous year. And so, the $25,000 reimbursement for expenses in a prior year will be viewed as current year income. 1C. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? To reduce the taxable income of the $300,000 and the $25,000 John should itemize deductions for the business and for his individual tax return.
C else equal, the break-even point for a taxpayer paying points on an original mortgage is longer All . when the taxpayer's marginal income tax rate increases in the years subsequent to the original financing compared to a taxpayer whose marginal tax rate does not change in the years subsequent to the year in which the loan is executed. D. None of the above statements is correct. 72. On March 31, 2011, Mary borrowed $200,000 to refinance the original mortgage on her principal residence.
b. How is the $25,000 treated for purposes of federal tax income? The $25,000 will have to be treated as an expense. c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? I have determined that you have to account for all qualified business expenses and only net income will be taxable.
Based on Mr. Martin’s prediction for 1996 sales of $28,206,000, and for 1997 sales of $33,847,000 and relying on the other assumptions provided in the Tire City case, prepare complete pro forma forecasts of TCI’s 1996 and 1997 income statements and year-end balance sheets. As a preliminary assumption, assume any new financing required will be in the form of bank debt. Assume all debt (i.e., existing debt and any new bank debt) bears interest at the same rate of 10%. 3. Using your set of pro forma forecasts, assess future financial health of Tire City as of the end of 1997.
How? Response: Issue: Different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for Federal income tax purposes Applicable Law: IRC code section 56(b) Conclusion: The only discernible difference is the amount of interest that can be deducted, and without further details I cannot provide you a more definitive answer as to which route is better. To the question of what are the tax consequences of selling a house the Smiths are allowed to deduct a total of $500,000 received from gain every two years on the sale of a primary residence. It is better to take a new mortgage only in case where the new one offers a rate of interest which is lower than the old one. Otherwise, there is not much sense in
(2.0 points) TIP: If you don't remember how to calculate return on investment, review the Calculating ROI pages in Section 4, Lesson 2. 9. Describe two examples of debt investments. (1-2 sentences. 1.0 points) 10.
The present value of a four-year annuity due of $10,000 at a 6 percent annual rate is $36,700. The present value of a four-year annuity due of $10,000 at an 8 percent annual rate is $35,770. What liability should Ace report on its December 31, Year One, balance sheet? 1. $0 2.
Calculate the PAYG instalment income for the quarter. FBT rate varied Variation of FBT Fringe benefits ATO instalment preprinted on BAS 19 F1 2 400 Estimated total fringe benefits tax payable for year Varied fringe benefits tax instalment amount Transfer the amount at F3 to 6A on the BAS Summary F2 F3 F4 12 000 3 000 30 Reason for variation PAYG rate varied PAYG income tax instalment For the QUARTER from 1 Oct 20XX to 31 Dec 20XX Option 2: Calculate PAYG instalment using income times rate PAYG instalment income T1 $ 5 5.61 4 5 % 6
Amy paid the full amount of property tax of $2,500. Calculate both Paul and Amy’s allowable deductions for the property tax. Assume a 365 day year. Paul lived at the property for 90 days from January 1 to April 1, than Amy lived there for 275 days from April 2 to December 31. Paul is eligible for a deduction of $616 of the property tax (2500*365/90) = 616.43.
We assume that the amount of debt has been constant over 2007. A better option to calculate cost of debt would be to use a synthesized rating based on the interest coverage ratio and use the corresponding default spread, but unfortunately we do not have data of these spreads for 2007. We use the market value of equity to estimate the weight of equity. The market capitalization of the firm was 128,2 million on 31-12-2007 (we assume that this is the date of the balance sheet, since this isn’t mentioned in the case). From this we can calculate the following ratio’s: debt/equity = 0,31 debt/(debt+equity) = 0,24 equity/(debt+equity) = 0,76 In calculating these ratio’s we use gross debt instead of net debt, because in our opinion the debt and cash of the firm