ack purchases a house for $90,000 and spends $15,000 to renovate it. He holds the house for 35 years and then sells it in the middle of a real estate bubble for $400,000. How much of that amount does he have to pay taxes?

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The severson family owns a house worth $280,000, of which they still owe $113,545 on the mortgage. They also own two cars, one worth $5,200 and the other worth $15,600. They still owe $9,200 on one of the car loans. They have $2,300 in credit card debt and owe $18,200 for their daughter’s wedding. What is their net worth? A $157,555 B $162,155 C $143,245 D $300,800

Joan Bullato, because of her great fondness for his music, has purchased the rights to one of the songs written by John Clapton. She estimates that the royalties from the song will total about $35,000 per year for the next few years. She has no plans to buy any additional song rights. Explain whether the royalties she receives would be treated as business income or property income. In addition, indicate how any gain or loss on a disposition of the rights would be taxed.

Leon has a gross estate estimated at $14.3 million. He is not married but does have two adult children who he wants to receive all of his estate. Leon is the sole owner of income-producing real estate valued at $900,000. He currently depends on the income produced by this real estate to maintain his standard of living. However, Leon is certain that when he retires in 10 years, at age 65, he will no longer need this income due to a generous income from a defined benefit retirement plan. Leon's financial planner has told Leon that his estate could face a severe liquidity crisis if in retirement. In which one of the following trusts would it be best for Leon to place his income-producing property in order to improve his estate's liquidity position in retirement?   A)A revocable trust to last for Leon’s lifetime, with all trust assets to be distributed to his children at his death   B)An irrevocable trust to last for 10 years that will annually pay Leon income at the trustee’s…

Sheila inherited 300 shares of stock, 100 shares of Magenta and 200 shares of Purple. She has a stockbroker sell the shares for her, uses the proceeds for personal expenses, and thinks nothing further about the transactions. What issues does she face when she prepares her Federal income tax return?

Wrett purchases a new four-wheeler with a loan from his bank. The bank requires that he use his car, which is paid off, as collateral for the loan he secured from the bank. The value of the 4-wheeler is $2500.00. The value of the car is $15,000.00. Wrett defaults on his loan for the 4-wheeler and thus is forced to sell his car to repay the loan. Which statement below is true regarding this secured transaction?   Multiple Choice Since the value of the car far exceeds the value of the 4-wheeler, the bank must accept an alternate good closer to value of the 4-wheeler. Wrett must dispose of his car and apply the proceeds to the loan and if there is any surplus the money belongs to Wrett. The bank will sell the car for the value of the loan of the 4-wheeler, not the actual fair market value of the car. Wrett must hand over physical possession and title to the car.   In a workout, creditors are usually paid in all of the following ways except,   Multiple Choice Bankruptcy…

Martha bought a home in 1988 at a cost of $100,000.00. She put 20% down and financed the remainder by way of a mortgage. She paid the mortgage off in 20 years. Over the years, she spent $45,000 improving and updating the house. Martha sold her home last year for $310,000.00 What was the value of Martha's equity in her home?