Bilal is an employee of King Brands Ltd. (a listed Co). In tax year 2021, his basic salary aggregated to Rs. 1,500,000. The company offered him shares option for acquiring 5,000 shares under employee share scheme. Cost of option amounted to Rs. 1,000. He exercised the option @ Rs. 50/share on 1st September, 2020. Fair market value (FMV) at the time of exercise of shares was Rs. 70/share. After holding the shares for a period of 202 days, he disposed them off at: a) Rs 90 / share b) Rs 40 / share Required In each of the above scenarios, compute Mr. Bilal's taxable income and tax liability for tax year 2021. need answer fast plz

Bilal is an employee of King Brands Ltd. (a listed Co). In tax year 2021, his basic salary aggregated to Rs. 1,500,000. The company offered him shares option for acquiring 5,000 shares under employee share scheme. Cost of option amounted to Rs. 1,000. He exercised the option @ Rs. 50/share on 1st September, 2020. Fair market value (FMV) at the time of exercise of shares was Rs. 70/share. After holding the shares for a period of 202 days, he disposed them off at: a) Rs 90 / share b) Rs 40 / share Required In each of the above scenarios, compute Mr. Bilal's taxable income and tax liability for tax year 2021. need answer fast plz

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 25CE

See similar textbooks

Similar questions

Abel (Pty) Ltd is a resident company with one shareholder, Mr Dlamini (33 years old). Abel (Pty) Ltd had a profit before tax of R1 000 000 for the financial year ended 28 February 2019. You may assume that the company’s taxable income equals its accounting profit before tax. Abel (Pty) Ltd distributed all the available profit after tax to Mr Dlamini on 28 February 2019. Calculate the tax payable by both Abel (Pty) Ltd and Mr Dlamini in respect of Abel (Pty) Ltd’s profits and the distribution thereof for the 2019 year of assessment.
On 6 April 2020, Ricard commenced in self-employment, running a restaurant.Richard’s sales since the commencement of trading have been as follows:April to July 2020 £10,500 per monthAugust to November 2020 £15,000 per monthDecember 2019 to March 2021 £21,500 per mothsThese figures are stated exclusive of Value added tax (VAT). Ricard’s sales are all standard rated. As a trainee Chartered Certified accountant you have advised Richard in writing that he should be registered for VAT, but he has refused to register because he thinks his net profit is insufficient to cover the additional cost which would be incurred. Required a. Explain from what date Richard was required to be compulsorily registered for VAT and VAT implications of continuing to trade after this date without registering.You are not expected to explain the VAT penalties arising from late VAT registration b. Briefly explain from an ethical viewpoint the issues you, as a trainee Chartered Certified accountant, should…
R. Pedro Penduko resigned in 2019 after 20 years of service. He had the following income during the year. Salary net of P80,000 withholding tax, P20,000 SS, P18,000 PhilHealth and P40,000 13th month pay P 480,000 Separation Pay 1,000,000 Compute the gross income to be reported in the annual income tax.
During 2021 Erin received eligible dividends of $1,000, non-eligible dividends of $800 and foreign dividends of $1,000 before 10% foreign income tax was withheld. Her 2021 property income is (note eligible dividend gross up is 38% and non-eligible dividend gross up is 15%): $3,254 $3,300 $2,800 $2,794
Suzy Service Company (SSC) grants an ISO to Bill on March 31, 2016, for 200 shares with an exercise price of $3, the FMV of the stock of March 31, 2016. Mary Jo exercises the ISO on April 15, 2017, when the stock is worth $5 a share. She sold the stock on September 12, 2016, for $6 a share. What are the tax consequences to Mary Jo and SSC on the following dates? (a) March 31, 2016 (Grant) (b) April 15, 2017 (Exercise) (c) September 12, 2017 (Sale of stock)
Suppose that at the beginning of 2021 Jamaal's basis in his S corporation stock is $1,000 and he has a $10,000 debt basis associated with a $10,000 loan he made to the S corporation. In 2021, Jamaal's share of S corporation income is $4,000, and he received a $7.000 distribution from the S corporation. How much total income does Jamaal report in 2021 from these transactions? Multiple Choice $0 $4,000 $6,000 $7,000 None of the choices are correct.
An employee of a Canadian Controlled Private Corporation receives an option to purchase 1000 of her employer’s common shares at $20 per share in July, 2019. At this time, the fair market value of the stock is $19 per share. In March 2020, when the fair market value is $26 per share, she exercises the option and immediately sells the shares. By what amount do these transactions increase her taxable income and in which year?
X Corporation, registered under PEZA, enjoying 5% preferential tax rate. In 2019, X’s sales totaled 2,000,000 and cost of sale is 500,000. Operating expenses is 300,000. This was the result of registered activities of X Corporation in 2019. What is the income tax payable to BIR?
Suppose that at the beginning of 2019 José's basis in his S corporation stock was $17,000 and José has directly loaned the S corporation $5,000. During 2019, the S corporation reported an $75,000 ordinary business loss and no separately stated items. How much of the ordinary loss is deductible by José if he owns 40 percent of the S corporation? Explain the rule and show computation.
During 2019, Matti Conner, president of Maggert Company, was paid a semimonthly salary of $6,000. Compute theamount of FICA taxes that should be withheld from her:OASDI HIa. 9th paycheck $b. 22nd paycheck $c. 24th paycheck $d. If Matti Conner’s year-to-date earnings as of her 24th paycheck are $144,000 and her year-end bonus is$100,000, how much is the additional 0.9% HI taxwithheld? $
On December 31, 2018, Mr. Tom London gives shares with an adjusted cost base of $21,500 and a fair market value of $35,200 to his 9 year old son, Patrick London. On February 24, 2019, the shares pay eligible dividends of $2,060 ($2,843 taxable amount) and, on August 31, 2019, Patrick sells the shares for $39,800. Required: What are the tax consequences for Mr. London and Patrick in each of the years 2018 and 2019? If there are no tax consequences for either individual in a given year, you should clearly state this fact in your answer.
Kenneth is the Chief Executive Officer of Alpha Ltd. He was provided with a flat in Repulse Bay by Beta Ltd, a subsidiary of Alpha Ltd. No remuneration was paid by Beta Ltd to Kenneth. In connection with Kenneth's employment with Alpha Ltd, he received salary income totalling $12,000,000 for the year of assessment 2020/21. In addition, he exercised a share option during the year and the taxable gain was $560,000. Deductible expenses agreed with the Inland Revenue Department to be $170,000. What is the taxable benefit from the accommodation provided by Beta Ltd for the year of assessment 2020/21?