Subject: acounting Jimmy has fallen on hard times recently. Last year he borrowed $348,000 and added an additional $84,500 of his own funds topurchase $432,500 of undeveloped real estate. This year the value of the real estate dropped dramatically, and Jimmy's lenderagreed to reduce the loan amount to $327,400.For each of the following independent situations, indicate the amount Jimmy must include in gross income:Note: Leave no answer blank. Enter zero if applicable.Required:a. The real estate is worth $268,900 and Jimmy has no other assets or liabilities.b. The real estate is worth $337,250 and Jimmy has no other assets or liabilities.c. The real estate is worth $291,900 and Jimmy has $52,300 in other assets but no other liabilities.Complete this question by entering your answers in the tabs below.Required A Required BRequired CThe real estate is worth $268,900 and Jimmy has no other assets or liabilities.Amount Included in Gross IncomeScenario A< Required ARequired B >

The following basic information as follows:- Jimmy has fallen on hard times recently. Last year he…

Answered: The real estate is worth $268,900 and…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 29P

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Jimmy has fallen on hard times recently. Last year he borrowed $348,000 and added an additional $84,500 of his own funds to purchase $432,500 of undeveloped real estate. This year the value of the real estate dropped dramatically, and Jimmy's lender agreed to reduce the loan amount to $327,400.
Carlos opens a dry cleaning store during the year. He invests 30,000 of his own money and borrows 60,000 from a local bank. He uses 40,000 of the loan to buy a building and the remaining 20,000 for equipment. During the first year, the store has a loss of 24,000. How much of the loss can Carlos deduct if the loan from the bank is nonrecourse? How much does Carlos have at risk at the end of the first year?
For each of the following, determine the amount that should be included in gross income: a. Peyton was selected the most valuable player in the Super Bowl. In recognition of this, he was awarded an automobile with a value of 60,000. Peyton did not need the automobile, so he asked that the title be put in his parents names. b. Jacob was awarded the Nobel Peace Prize. When he was presented the check for 1,400,000, Jacob said, I do not need the money. Give it to the United Nations to use toward the goal of world peace. c. Linda won the Craig County Fair beauty pageant. She received a 10,000 scholarship that paid her 6,000 for tuition and 4,000 for meals and housing for the academic year.
Sally is in the business of purchasing accounts receivable. Last year, Sally purchased an account receivable with a face value of $80,000 for $60,000. During the current year, Sally settled the account, receiving $65,000. Determine the maximum amount of the bad debt deduction for Sally for the current year. If an amount is zero, enter "0". Sally's basis in the account receivable is $fill in the blank 1 . Therefore, she has a bad debt deduction of $fill in the blank 2 and income of $fill in the blank 3 .
[The following information applies to the questions displayed below.) On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $2.04 million by paying $290,000 down and borrowing the remaining $1.75 million with a 5.6 percent loan secured by the home. The Franklins paid interest only on the loan for year 1, year 2, and year 3 (unless stated otherwise). Note: Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable. Problem 14-48 Part b (Algo) b. What is the amount of interest expense the Franklins may deduct in year 2 assuming year 1 is 2022? I Deductible interest expense
On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $2.29 million by paying $240,000 down and borrowing the remaining $2.05 million with a 6.8 percent loan secured by the home. The Franklins paid interest only on the loan for year 1, year 2, and year 3 (unless stated otherwise). Note: Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable. Required: What is the amount of interest expense the Franklins may deduct in year 3 assuming year 1 is 2017? What is the amount of interest expense the Franklins may deduct in year 2 assuming year 1 is 2021? Assume that year 1 is 2022 and that in year 2, the Franklins pay off the entire loan, but at the beginning of year 3, they borrow $375,000 secured by the home at a 7 percent rate. They make interest-only payments on the loan during the year, and they use the loan proceeds for purposes unrelated to the home. What amount of interest…
Carrie loaned her friend $4500 to buy a used car. She had her friend sign a note with repayment terms and set a reasonable interest rate on the note because the $4500 was most of her savings. Her friend left town with out a forwarding address, and nobody Carrie knows has heard from her in the last year. How should Carrie treat the bad loan for tax purpose? This is a ___________ bad debt. Assuming this is carries only capital gain or loss, she may claim $____________in the current year and __________any remaining amount.
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The real estate is worth $268,900 and Jimmy has no other assets or liabilities. The real estate is worth $337,250 and Jimmy has no other assets or liabilities. The real estate is worth $291,900 and Jimmy has $52,300 in other assets but no other liabilities.