Also, with even higher liabilities, it may be difficult to meet the debt service agreements if the company doesn’t have enough cash flow from operations. 1(c) What potential income tax ramifications exist for Mr. Johnson personally if he purchases the stock of Smithon and converts it to an S corporation? If the Mr.Jones decides to convert Smithon to a subchapter S Corporation, it will enable the corporation itself to avoid paying taxes, but the profit and losses will be passed to shareholders as personal income and losses. Now we should consider the expected losses from the huge investment in equipment purchase. Net operating losses cannot be used to shelter personal income but can be carried forward by a C corporation to provide tax benefit in future when the business expects profit.
3a. What is the shortest loan (36 months, 48 months, 60 months or 72 months) that has a monthly payment within your $500 budget that will allow you to buy the $45,000 car? Answer: Through Bank of America, I found a rate of 2.99% for the 36, 48 and 60 month loans. We are able to put down 20% and will need to finance $36,000. There is no loan period for the $45,000 car that would be under our $500
How must Mary Beth treat this loss on her 2011 tax return? Because the building counts as passive income she can report the loss as a passive loss. 34. Mike and Sally Card file a joint return for the 2011 tax year. Their adjusted gross income is $65,000
However, if the expenses incurred while working on this case were not deducted previously, then they would be non-taxable. 1(c) What is my determination regarding reducing the taxable amount of income for both the $300,000 and the $25,000? As the full amount of the $300,000 was received after the closure of the case in a lump sum, then there is little to do in minimizing the taxes other than taking full advantage of the deductions allowed for businesses. 2(b) Mrs. Smith, your first question is regarding what the different tax consequences would be on paying down the current mortgage and assuming a new mortgage for Federal income tax purposes. For the sales of the current home, the IRS states that married taxpayers can exclude up to $500,000 of gain upon the sale of the residence.
In Alexa's situation, all expenses incurred in this year is 28,900 while the passive income is only 20,000. Since we are not sure if Alex qualifies as an active participant at this point, none of the passive loss can be deducted again the passive income. 2. Assuming that Alexa's AGI from other sources is $90,000, what effect does the rental activity have on Alexa's AGI?Alexa makes all decisions with respect to the property. The AGI will be reduced by 8,900.
The compensation expense for 2011 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.) ** $77,468 | $80,022 | $82,575 | $160,043 | 4. On January 1, 2010, Wilson Corporation granted Emelia Walker, its president, a compensatory stock option plan to purchase 8,000 shares of Wilson's $10 par common stock. The option price is $25 per share and the option has a fair value of $7 per option, which is exercisable on January 1, 2014, after four years of service. How much compensation expense should Wilson recognize on December 31, 2010?
If there is less number of accidents than estimated, the company would save even more and not incur all the expense that the law firm estimated. With the greatest good for the greatest number thought, $12 million cost is definitely less than $18 million cost for the fix. This way the company saves $6 million in cost. And the lesser represented percentage in this case will be those who might loss property and life, if at all in an accident. Rights ethics: Rights ethics are carried on by strongly implying individual rights.
$2,040,500 B. $2,212,500 C. $2,260,500 D. $2,171,500 E. $2,071,500 Difficulty: Medium 4. A company should always use the equity method to account for an investment if A. It has the ability to exercise significant influence over the operating policies of the investee B. It owns 30% of another company's stock C. It has a controlling interest (more than 50%) of another company's stock D. The investment was made primarily to earn a return on excess cash E. It does not have the ability to
Problem 17-7 on Ex-dividend Price based on Chapter 17 Payout Policy Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Natsam’s board has decided to payout this cash as a one-time dividend. a. What is the ex-dividend price of a share in a perfect capital market?
J. Premium offers outstanding- Current Liability K. Discount notes payable- Current Liability L. Employee payroll deductions unremitted- Current Liability M. Current maturities of long-term debts to be paid from current assets- Current Liability N. Cash dividends declared but unpaid- Current Liability O. Dividends in arrears on preferred stock- Footnote disclosure P. Loans from officers- Current Liability 13-2. Accounts and Notes Payable * The following are selected 2012 transactions of Darby Corporation. Sept. 1 | Purchased inventory from Orion Company on account for $50,000.