Under Section 1031 a personal residence or an automobile used solely for personal purposes will qualify for a tax free exchange. T/F
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Under Section 1031 a personal residence or an automobile used solely for personal purposes will qualify for a tax free exchange.
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perty cannot be used by dealers in real property.
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- QUESTION 28The general deduction formula requires taxpayers to carry on a trade to be able to deduct expenses. Which one of the following scenarios would not constitute the carrying-on of a trade?(1) The taxpayer is an agent and manages properties and sells properties on behalf of clients and earns fees and commission.(2) The taxpayer carries on a business as a share dealer speculating on the JSE.(3) The taxpayer has a trademark and earns royalties by granting the right to use the trademark.(4) The taxpayer owns several investments in the form of properties and earns rental income.(5) The taxpayer buys shares in a private company and earns dividends from shares.1.The definition of gross income in the tax law is: A. All items specifically listed as income in the tax law B. All cash payments received for goods provided and services performed C. All income from whatever source derived D. All income from whatever source derived unless the income is earned illegally 2.Which of the following is not taxable for income tax purposes? A.Prizes B.Severance pay C.Gifts D.Partnership income E.All of the above are taxable 3.All of the following items are taxable to the taxpayer receiving them, except: A.Life insurance proceeds B.Unemployment compensation C.Embezzled funds D.Prizes E.Gambling winningsWhich of the following statements is wrong? a) The sale of a principal residence may be exempt from capital gains taxation. b) The sale or a real property to the government may be subject to regular income taxation. c) Capital gains on the sale of real property located in the Philippines and held as capital asset is based on presumed gains d) None of the above
- Access and examine section 17 of the Income Tax Act of Jamaica,then perform the following tasks:1. Distinguish between a fictitious transaction and an artificialtransaction2. Outline the anti-avoidance provisions as they relate to:•the transfer of property to a child, a trust, or a connected person•dealings in securityDiscuss the circumstances when an investor can use section 1031 of the Internal Revenue Code (IRC) for like-kind of real estate exchanges to defer taxes when making a sale or disposal of property.Property taxes are only paid on personal items within a residence - like jewelry, electronics, and furniture. The actual land and building does not get taxed. True or False
- The definition of gross income in the tax law is: All items specifically listed as income in the tax law All cash payments received for goods provided and services performed All income from whatever source derived All income from whatever source derived unless the income is earned illegallyRIGHT OR WRONG For taxation purposes, the house and lot as family home of taxpayer is his ordinary asset. When inventory of goods are sold at price lower than cost, the seller has capital loss. When production machine of the business is sold at a mark up on cost, the seller has ordinary business income. When personal valuable necklace of the taxpayer is stolen, the taxpayer has capital loss. Capital gain tax is an income tax. The mark up on the sale of an equipment used in business activities is reportable in 1701 tax return of the sole owner of such business. 7. The sole proprietor sold for P500,000 its inventory with carrying cost of P400,000. The sale will result to BUSINESS INCOME OF 100k CAPITAL GAIN OF 100k BUSINESS INCOME OF 500k CAPITAL GAIN OF 500k 8. The investment in bond was sold by the resident citizen at mark up of P200,000 on carrying cost. If the bond has maturity of 5 years, the mark up on cost is EXEMPT FROM INCOME TAX TAXABLE INCOME BUSINESS INCOME…1. Which of the following is not deductible from gross income? a. Transportation expense from the main office to the branch b. Transportation expense from home to the office and from the office back to home c. Travel expenses on business trips d. Travel expenses while away from home in the pursuit of trade, business or profession. 2. Examples of taxes that are deductible except: a. Occupation tax b. Privilege tax c. Documentary stamp tax d. Philippine income tax
- 28 Which is FALSE in partial disposition of estate? Group of answer choices The estate is still required to file the estate tax return within the prescriptive period In case of failure to pay, total estate tax due shall be immediately due and demandable without penalties if taxpayer has justifiable reason The taxpayer is required to execute an undertaking that the proceeds shall be exclusively used for the payment of estate tax The BIR may allow the sale of a portion of property without payment of estate tax provided the proceeds shall be used for the payment of estate taxWhat is the only way to convert a tax deferral from a 1031 like kind exchange into a tax avoidance? Group of answer choices 1) Employing a qualified intermediary 2) Using a LLC to own the property 3) Nonw of these are correct 4) Employing a smart tax acciuntant/lawyer 5) DeathNo deductions shall be allowed where the transaction is between “related taxpayers” under Sec. 36(B) of the Tax Code for A) Losses from sales or exchanges of propertyB) Interest expenseC) Bad debts * a. A and B b. B and C c. A and C d. All