Mr. Leody, a resident citizen, is working for a large real estate development company in the country and in 2020, he was promoted to Vice-President of the company. With more responsibilities comes higher pay. In 2021, he decided to buy a new car worth P2 Million and he traded-in his old car with a market value of P800,000.00 and paid the difference of P1.2 Million to the car company. The old car, which was bought three (3) years ago by the father of Mr. Leody at a price of P700,000.00 was donated by him and registered in the name of his son. The corresponding donor's tax thereon was duly paid by the father. How much is the tax basis of the old car?

Mr. Leody, a resident citizen, is working for a large real estate development company in the country and in 2020, he was promoted to Vice-President of the company. With more responsibilities comes higher pay. In 2021, he decided to buy a new car worth P2 Million and he traded-in his old car with a market value of P800,000.00 and paid the difference of P1.2 Million to the car company. The old car, which was bought three (3) years ago by the father of Mr. Leody at a price of P700,000.00 was donated by him and registered in the name of his son. The corresponding donor's tax thereon was duly paid by the father. How much is the tax basis of the old car?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Rebecca is moving away from New York City for her new job, so she must buy a car rather than rely on public transit. The new car she is considering will cost $ 18,000 to buy, $ 1,500 per year to insure, and $ 500 per year for maintenance after the 3-year warranty expires. She would keep the car for 7 years when it will have a salvage value of $ 7,000. She has found a 2-year-old car that is the same model for $ 13,000. The 3-year warranty is transferrable, so the annual maintenance cost of $500 starts in year 2. Because the car is less valuable, insurance is $300 per year less than for the new car. After 5 years, the vehicle will be 7 years old and will have the same salvage value of $ 7,000.Rebecca is ignoring costs for fuel, oil, tires and registration, because the two vehicles will have the same costs. If her interest rate is 9%, how much cheaper is the used car (difference of EAC of two vehicles)
A man hires a personal chef (cook) at $60,000 a year for her services. The two fall in love and get married, but the chef (cooking) services are still being performed with no explicit payment Suppose that the two divorce after 1 year of marriage, but the man continues to hire the chef for her services at $60,000 a year. What amount of the chef (cooking services) is added to GDP after the two divorce? 0 Not enough information provided to answer the question $120.000 $60.000
Briefly explain the taxation consequences for The City Limited, Mr. Norman and his wife of the company providing them with Mercedes motor cars and provide them with one piece of tax advice in relation to the cars. " In July 2024, The City Limited intends to purchase two newly registered petrol motor cars for use by Mr. Norman and his wife, Matilda. The two cars will be identical Mercedes cars, with manufacturer's list prices of £55,000 and CO2emissions of 92g/km Mr. Norman intends to undertake 12,000 business miles a year in his car with a total mileage of 18,000 miles. His wife is likely to drive 10,000 miles a year, none of which will relate to The City’s business..."
Sanjay has 100 euros to spend before he flies back to the United States. He wishes to purchase jewelry priced at $160 (U.S.) in a duty-free shop at the airport. Euros can be bought for $1.32 and sold for $1.24. The owner of the duty-free shop tells Sanjay that the jewelry can be purchased for 100 euros plus $40 (U.S.). Is this a good deal for Sanjay? Explain your reasoning.
Required information [The following information applies to the questions displayed below.] Seiko's current salary is $118,000. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply, Inc. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays only $100,000 per year, but it allows employees to purchase one new car per year at a discount of $21,200. This discount qualifies as a nontaxable fringe benefit. In an effort to keep Seiko as an employee, Idaho Office Supply, Inc. offers her a $10,200 raise. Answer the following questions about this analysis. b-1. Financially, which offer is better for Seiko on an after-tax basis? Car dealer's offer Current employer's offer Both offers b-2. By how much is the offer better for Seiko on an after tax basis (Assume that Seiko is going to purchase the new…
Kuldeep Singh just bought an Indian restaurant (goodwill) from Manpreet for the amount of $750,000 and on top of that Kuldeep also paid Manpreet $100,000 for Manpreet to agree not to open another Indian restaurant for the next three (3) years. Kuldeep also pays $30,000 for Manpreet to advertise Kuldeep’s restaurant on Manpreet’s car. Required: How much “Ordinary Income” can Manpreet earn from the above scenario?
A new home was sold for $400,000 in Hillsborough County. The buyer took out a mortgage for $300,000 and paid the rest in cash. The buyer agrees to pay for all three state transfer taxes (documentary stamp on the deed, promissory note, and the intangible tax on the new mortgage). How much will the buyer owe in state transfer taxes? $5,030 $2,800 $4.450 $4.150
X, resident citizen, had the following data for 2019: Gambling losses, P10,000; Long term capital gain on sale of cellphone, P20,000; Long term capital gain on sale of real property in the Philippines, P100,000Compensation income, P200,000; Cash dividend, P10,000; Cash donations received from his friend, P100,000Cash inheritance, P200,000. How much is the taxable net income of X subject to GTR? None of the above 210,000 310,000 220,000 410,000
sir, the owner of a carving wood craft business with a gross income (turnover) of Rp.1,200,000,000.00 per year. Pak Sandi will pay taxes on his business based on the latest income tax collection regulations. The amount of income tax payable per year that must be paid is
Menlyn Mowbray owns a fleet of light delivery vehicles (aka bakkie). One of his delivery vehicles with a market value of R170 000, and which had originally cost R190 000 on 1 March 2020 was exactly two years old at that point in time. (The Small Business Development Corporation had valued it at this date to determine the value of his assets and liabilities before granting him a loan. As of 1 March 2020, he has used his light delivery van as follows: § 60% for private purposes § 40% for business purposes at his trading store Menlyn Mowbray’s costs for in relation to this delivery vehicle incurred during the 2020 year of assessment were as follows: Fuel and oil Repairs and maintenance Licence Insurance 31 200 6 000 720 6 00 Additional information: The Commissioner has approved a four-year write off period for the light delivery vehicle. 1.1 Discuss and determine the amounts that resulting from the above transactions that are deductible in the determination of Menlyn Mowbray’s taxable…
Roberto borrowed $10,000 dollars from the mafia guy down the block Guido Colombo at a rate of 30% on January 1st 2020. So, in January 1st 2022 two years later, Roberto paid Guido $ 5,000 dollars from that loan. Guido feel some sympathy, he lowered the rate from 30% to 18% percent. How much money will Roberto owe Guido Colombo as of January 2024
1.Mariang is a Pilipinas Got Talent champion. She won P2million as cash prize, a house and lot at ABC Homes in Baguio City with the total fair value of P5 million, and a recording contract with Sony Music Inc. for P10 million in two years. How much his income tax, if any? 2. Maki is a stockholder in both Agrix Corporation (domestic corporation) and Atlanta corporation (non-resident foreign corporation). During the year, Jhaeron earned P100,000 dividends from Agrix and P300,000 dividends from Atlanta. Maki is a Filipino citizen residing in the Philippines. How much of the dividend income of Maki is subject to income tax in the Philippines?