In July 2020, the year of Ralph's death, Ralph's executor properly elects 6166 and has a taxable estate equal to $ 12,800,000. At the time of Ralph's death, his only asset is a closely held business interest. If the long-term annual AFR is 3%, how much is the first annual interest payment? (Assume no previous taxable gifts.) Question 7 options: A) S0. B) $ 9,760. C) $14, 640. D) $18,600.
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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?Pedro sells investment land on September 1, 2020. Information pertaining to the sale follows: Adjusted basis $ 12,000 43,200 Selling price Selling expenses Down payment Four installment payments Mortgage assumed by the buyer Required: Each installment payment is due on September 1 of 2021, 2022, 2023, and 2024 (ignore interest). Determine the tax consequences in 2020, 2021, 2022, 2023, and 2024. (Do not round intermediate calculations. Round your final answers to nearest whole dollar value.) Year 2020 2021 2022 2023 2024 Total Gain Recognized $ 600 4,000 7,200 10,400 0An individual has an RSP that they are drawing money out of during 2020. TheRRSP has earned dividends of $10,000. The individual withdraws $32,000 from theRRSP. To obtain that much cash, the RSP sells investments worth $32,000 thathave a cost basis of $20,000. What is the individual's 2020 taxable income as aresult of the RRSP? A) 42000 B) 16000 C)19800 D)32000
- < Daniel's standard deduction for 2023 is $13,850. a. Classify the following expenses as either "Deductible for AGI", "Deductible from AGI", or "Not deductible". Payment of alimony (divorce finalized in March 2021) Mortgage interest on residence Property tax on residence Contribution to traditional IRA (assume the amount is fully deductible) Contribution to United Church Loss on the sale of real estate (held for investment) Medical expenses State income tax Federal income tax What is Daniel's gross income and his AGI? Gross income: $ AGI: $ b. Should Daniel itemize his deductions from AGI or take the standard deduction? Because Daniel's total itemized deductions (after any limitations) are $ he would benefit from 10:34Question 21. During 2023, Henry sold a piece of land held for investment to an unrelated 3rd party. Henry originally purchased the land for $600,000. The sale price was $1,000,000, which the buyer will pay in 5 annual installments of $200,000 each, with the first installment due in 2023. To the extent allowed, Henry will elect the installment method. Which choice accurately reflects the gain Henry will recognize each year? $80,000 in 2023; $80,000 in 2024; $80,000 in 2025; $80,000 in 2026; and $80,000 in 2027 $400,000 in 2023; $0 in 2024; $0 in 2025; $0 in 2026; and $0 in 2027 SO in 2023; $0 in 2024; $0 in 2025; $0 in 2026; and $400,000 in 2027 $240,000 in 2023; $40,000 in 2024; $40,000 in 2025; $40,000 in 2026; and $40,000 in 2027Drew receives an inheritance that pays him $53,000 every three months for the next two years. Which of the following is closest to the present value (PV) of this inheritance if the interest rate is 8.3% (EAR)? A. $310,421 B. $388,027 C. $465,632 D. Use BA. II where applicable
- Pedro sells investment land on September 1, 2019. Information pertaining to the sale follows: Adjusted basis $26,000 Selling price 93,600 Selling expenses 1,250 Down payment 10,500 Four installment payments 15,600 Mortgage assumed by the buyer 20,700 Required: Each installment payment is due on September 1 of 2020, 2021, 2022, and 2023 (ignore interest). Determine the tax consequences in 2019, 2020, 2021, 2022, and 2023. (Do not round intermediate calculations. Round your final answers to nearest whole dollar value.)In 2021 an investor sold capital property for $80,000. The cost base of the property was $55,000. The investor agreed to the following payment schedule: $35,000 in 2021, $25,000 in 2022 and $20,000 in 2023. The investor elects to use the deferred proceeds method to report taxable income from this sale. How much would be the taxable capital gain reported by the investor in 2021? A. $20,000 B. $14,063 C. $10,938 D. $10,000 E. None of the aboveWhat is the taxpayer's long-term capital gain liability, given the following security sales during the tax year? Assume that she is in the 15% tax bracket for long-term capital gains and the 22% tax bracket for ordinary income. Asset Stock A Stock B Stock C Stock D O $648 O $950 O $1,637 O $1,856 Purchase date Nov 1, 2022 May 4, 2023 Feb 5, 2021 Oct 6, 2018 Sale date Nov 18, 2023 Dec 30, 2023 Oct 2, 2023 May 4, 2023 Capital gain (loss) +$2,400 (gain) +$8,050 (gain) -$1,560 (loss) +$3,480 (gain)
- 1. Marge has a Roth IRA held more than 5 years to which she has contributed $30,000. The IRA has a current value of $62,000. Marge is 65 years old and she takes a distribution of $38,000. How much of the distribution will be taxable to Marge? a. $30,000 b. $0 c. $38,000 d. $8,000 e. Some other amount 2. What is the deadline for making a contribution to a traditional IRA or a Roth IRA for 2019? a. December 31, 2019 b. April 15, 2020 c. October 15, 2020 d. April 17, 201910. If a decedent dies in 2020 with a taxable estate of $16,000,000 and has never used any of his applicable estate tax credit, what amount of the decedent's estate tax will be absorbed by the applicable estate tax credit amount in 2020 (the maximum amount of estate tax the decedent can avoid)? A. $780,800. B. $1,455,800, C. $4,577,800. D. $11,580,000.Neil has been loaned a caravan by his employer. The market value at the date it was loaned to him was £30,000, on 6th April 2021. On 6th April 2023 he bought it from his employer for £2,000, on which date the market value is estimated to be £8,000. What will be Neil's taxable benefit in respect of this asset for 2023/24? Question 11Select one: a. £6,000 b . £16,000 c. £30,000 d. £22,000