ence of P1.2 Millio
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Mr. Leody, a resident citizen, is working for a large real estate development company in the country and in 2020, he was promoted to Vice-President of the company. With more responsibilities comes higher pay. In 2021, he decided to buy a new car worth P2 Million and he traded-in his old car with a market value of P800,000.00 and paid the difference of P1.2 Million to the car company. The old car, which was bought three (3) years ago by the father of Mr. Leody at a price of P700,000.00 was donated by him and registered in the name of his son. The corresponding donor’s tax thereon was duly paid by the father. How much if any is the tax liability of Mr. Leody on the trade in of his old car?
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- On June 30, 2019, Kelly sold property for 240,000 cash and a 960,000 note due on September 30, 2020. The note will also pay 6% interest, which is slightly higher than the Federal rate. Kellys cost of the property was 400,000. She is concerned that Congress may increase the tax rate that will apply when the note is collected. Kellys after-tax rate of return on investments is 6%. a. What can Kelly do to avoid the expected higher tax rate? b. Assuming that Kellys marginal combined Federal and state tax rate is 25% in 2019, how much would the tax rates need to increase to make the option identified in part (a) advisable?Mr. Leody, a resident citizen, is working for a large real estate development company in the country and in 2020, he was promoted to Vice-President of the company. With more responsibilities comes higher pay. In 2021, he decided to buy a new car worth P2 Million and he traded-in his old car with a market value of P800,000.00 and paid the difference of P1.2 Million to the car company. The old car, which was bought three (3) years ago by the father of Mr. Leody at a price of P700,000.00 was donated by him and registered in the name of his son. The corresponding donor’s tax thereon was duly paid by the father. How much is the tax basis of the old car?Virginia is an accountant for a global CPA firm. She is being temporarily transferred from the Raleigh, North Carolina, office to Tokyo. She will leave Raleigh on October 7, 2020, and will be out of the country for four years. She sells her personal residence on September 30, 2020, for $255,000 (her adjusted basis is $230,000). Upon her return to the United States in 2024, she purchases a new residence in Los Angeles for $245,000, where she will continue working for the same firm. Required: What are Virginia’s realized and recognized gain or loss? (If there is no gain or loss is recognized, select "No gain/loss".) What is Virginia’s basis in the new residence?
- In 2020, Ms. Montibon owns a grocery store with gross receipts of P1,375,000. Her cost of sales and operating expenses are P600,000 and P400,000, respectively, and with non-operating income of P100,000.1. What business tax is due to her?2. How much is the income tax due to her?3. How much tax due if she availed the OSD?Kaan, a 55-year-old software engineer, earned a pre-tax income of $200,000 in 2024. He plans to quit his current job in 10 years to start his own business. Kaan already holds several accounts with RBC but intends to open new TFSA, RRSP, and non-registered investment accounts with TD Bank. He will allocate funds in TD Bank for his business venture while reserving funds in RBC for emergencies and retirement. Kaan has the capacity to save $100,000 annually in real, before tax dollars and will only deposit to TD bank accounts from now on until retirement. His savings strategy includes contributions to a TFSA, RRSP, and non-registered investment account at TD Bank. In 2024, he will contribute to the TFSA up to the 2024 annual limit, with contributions increasing annually to match the inflation rate. The RRSP contribution remains fixed at $20,000 in real dollars due to employer contributions. Any remaining savings are directed to the non-registered investment account. Contributions occur at…Kaan, a 55-year-old software engineer, earned a pre-tax income of $200,000 in 2024. He plans to quit his current job in 10 years to start his own business. Kaan already holds several accounts with RBC but intends to open new TFSA, RRSP, and non-registered investment accounts with TD Bank. He will allocate funds in TD Bank for his business venture while reserving funds in RBC for emergencies and retirement. Kaan has the capacity to save $100,000 annually in real, before tax dollars and will only deposit to TD bank accounts from now on until retirement. His savings strategy includes contributions to a TFSA, RRSP, and non-registered investment account at TD Bank. In 2024, he will contribute to the TFSA up to the 2024 annual limit, with contributions increasing annually to match the inflation rate. The RRSP contribution remains fixed at $20,000 in real dollars due to employer contributions. Any remaining savings are directed to the non-registered investment account. Contributions occur at…
- William was the marketing director of a trading company which carries business in Hong Kong. He received an annual salary of HK$700,000 for the year ended 31 March 2022. In December 2021, William took a 10-days trip to Canada to visit his son who is now taking a full-time degree program in the University of Canada. He spent one afternoon to visit one of the major customers. He spent HK40,000 for the entire trip and his employer fully reimbursed him. During the period from 1 April 2021 to 30 September 2021, he and his family lived in a hotel of two rooms which was rented for HK$20,000 per month by his employer. Starting from 1 October 2021 he and his family lived in a flat which was rented by him for HK$25,000 per month and his employer only reimbursed him HK$24,000 per month. Documentary evidence had to be submitted for the reimbursement. During the year ended 31 Mach 2022, William made the following payment:- 1) Paid annual membership fee of HK$4,000 to Chartered Institute of…George is the owner of numerous classic automobiles. His intention is to hold the automobiles until they increase in value and then sell them. He rents the automobiles for use in various events (e.g., antique automobile shows) while he is holding them. In 2020, he sold a classic automobile for $1,500,000. He had held the automobile for five years, and it had a tax basis of $750,000. Assuming a rate of return of 7%, how much would he have had to invest five years ago (instead of putting $750,000 into the car) to have had $1,500,000 this year? The present value factor for 5 years at 7% is .7130.$During 2021, Harry, a self-employed accountant, travels from Kansas City to Miami for a seven-day business trip. While in Miami, Harry decides to stay for an additional 5 days of vacation. Harry pays $600 for airfare, $200 for restaurant meals, and $500 for lodging while on business. The cost of meals and lodging while on vacation was $300 and $500, respectively. How much may Harry deduct as travel expenses for the trip?
- Mr. Rizki is a private employee who is currently planning to buy a car to support mobility in his work. Currently Mr. Rizki has a savings of Rp. 80,000,000 and intends to buy a car for Rp. 216,168,000. Savings owned by Mr. Rizki will be used as a down payment in the purchase of the car and the rest will be paid on credit in the amount of Rp. 4,000,000 with an installment period of 48 months. What is the nominal and effective interest rate on the credit interest?Cameron works as an accountant for PWC Pty Ltd. Hoping to increase his earnings, he re-enrolled to University to do a degree in Forensic Accounting. During the 2020 financial year, he paid $9,000 in course fees, plus $1,600 in textbooks. He also paid $900 for travel expenses to travel from his home... to university... and back to his home. Required: How much can Cameron claim in allowable deductions during the 2020 financial year? (You must give reasons for your calculations and refer to law)Ryan, an agent, was able to sell Mikoy Frozen Products worth 50,000.00. Given her commission of 10%. How much will he receive if his earnings are based on commission alone?
