Smith and Roberson’s Business Law
17th Edition
ISBN: 9781337094757
Author: Richard A. Mann, Barry S. Roberts
Publisher: Cengage Learning
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7 which of the following statements is correct about an ordinary life policy
A premium payment can be increased or decrease at the discretion of the premium payer
B the beneficiary designation can be changed to another person only if that person a medical
examination
C the policy owner may borrow against the cash value of the policy
D The named beneficiary must submit evidence of continuing insurable interest in the life of
the insured
Discuss the liability of a person on the Deed of Suretyship signed in favor of Led bank, if Led bank decides to institute an action for the recovery of outstanding bond installments
In 2022, Rebecca formed Black Corporation, a C-Corporation. Rebecca transferred real.
estate with an adjusted basis of $260,000 and a fair market value of $390,000 in
exchange for 100% of Black Corporation's common stock. The real estate was
encumbered by a mortgage of $290,000, which Black Corporation assumed. The total
value of Black Corporation's common stock after formation was $100,000.
Q
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a) What amount of gain or loss is realized and recognized by Rebecca on the real
estate transfer to Black Corporation?
b) What basis does Rebecca take in her Black Corporation stock?
c) What basis does Black Corporation take in the real estate contributed by
Rebecca?
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- Assume that during the year a trust received $18,058 of interest income and and made a distribution of $25,895 to the trust's sole beneficiary. How much of the distribution is taxable income to the trust's beneficiaryarrow_forwardGlen made a revocable transfer of his stock investments on February 14, 2022 in favor of his sister, Glena. Glen died on July 10, 2022. The stocks had the following fair values: February 14, 2022 March 16, 2022 P3,400,000 3,300,000 3,800,000 July 10, 2022 14. Assuming Glen did not revoke the property until the date of his death, what is the amount subject to transfer tax and the type of transfer tax to apply?arrow_forwardGustav desires to deposit with a Trust Company a sum just sufficient to provide his family with an annuity of $600 per month for twenty-four years. How much he deposit if the Trust Company agrees to accumulate interest at the rate of 6% payable monthly?arrow_forward
- Using Banking law Jargon, Brent Braxton, Carlyle Christian and Deborah Drummond together provided three separate guarantees in writing to the National Commercial Bank (NCB) of (Your Jurisdiction) Limited, regarding the promissory notes issued by Anthony Limited to NCB. The guarantees were made by Deed for US$200,000 each and clearly stated that if Anthony Limited defaulted on the repayment of the US$200,000 the money would be repaid by each of the guarantors. The NCB has written to BB, CC and DD requesting the repayment of the borrowed sums. However, BB, CC and DD are contending that they are secondarily liable for repayment of the borrowed sums. You have been asked to prepare legal advice for the Board of Directors on this matter. What is the nature of the advice you will give to NCB?arrow_forwardA mortgage is transfer of an interest in specific immoveable property for the purpose ofsecuring payment of some amount of money. Elaborate in what different ways amortgage is created by highlighting their characteristics and mutual rights and liabilitiesof the parties in a precise manner?arrow_forwardArnold, age 75, established an irrevocable trust to benefit his grandson, Randolph. Randolph will receive trust income annually until he reaches the age of 30. The trust will then terminate and all the principal of the trust will be distributed to Ashley, Arnold's 30 year old wife. Which of the following statement(s) is/are correct regarding Generation Skipping Transfer Tax (GSTT)? 1. If Randolph's father (Arnold's son) is deceased at the time the irrevocable trust is established, then Randolph is a nonskip person. II. If Ashley is not the spouse of Arnold when the trust terminates, then she is a skip person. A. I only. B. Il only. C. Both I and II. D. None of the above.arrow_forward
- Testator gives property to Tim in trust for Barney’s benefit, providing that Barney cannot anticipate the income by assignment or pledge. Barney borrows money from Linda, assigning his future income under the trust for a stated period. Can Linda obtain any judicial relief to prevent Barney from collecting this income? Why or why not?arrow_forwardNon-forfeiture provisions are included in whole life and endowment policies to assure the policyowner that certain minimum policy benefits shall remain with him even under certain changed conditions. Non-forfeiture values guarantee to the policyowner that A) No death claim will be denied for any misstatement on the application B) Any guaranteed policy values will belong to the policy owner even if premium payments are discounted The face amount of the policy will remain the same even if the insured's health becomes impaired The premium on the policy will remain the same even when another beneficiary D) is added to the policyarrow_forwardDescribe the requirements for establishing a suretyship relationship.arrow_forward
- A debenture issued by a company is a 'chose in action' and includes an undertaking of the company to repay as a debt the money lent to the company. The offer is not exempted from disclosure requirements provided under section 708 of Corporation Act 2001. Funders Bank holds security over the assets of the T-Rex Museum Ltd (T-Rex). After T-Rex defaulted, Funders appointed Jonas Lopping and Tybor Flanders as Receivers and Managers. Required: Explain the duties of Messrs. Lopping and Flanders when acting as Receivers and Managers.arrow_forwardBrent Braxton, Carlyle Christian and Deborah Drummond together provided three separate guarantees in writing to the National Commercial Bank (NCB) of (Your Jurisdiction) Limited, regarding the promissory notes issued by Anthony Limited to NCB. The guarantees were made by Deed for US$200,000 each and clearly stated that if Anthony Limited defaulted on the repayment of the US$200,000 the money would be repaid by each of the guarantors. The NCB has written to BB, CC and DD requesting the repayment of the borrowed sums. However, BB, CC and DD are contending that they are secondarily liable for repayment of the borrowed sums. You have been asked to prepare legal advice for the Board of Directors on this matter. What is the nature of the advice you will give to NCB?arrow_forwardAt the end of 2001, Lehnhoff Inc. had $75 million in cash on its balance sheet. During 2002, the following eventsoccurred. The cash flow from Lehnhoff’s operating activities totaled $325 million. Lehnhoff issued $500 million incommon stock. Lehnhoff’s notes payable decreased by $100 million. Lehnhoff purchased fixed assets totaling $600million. How much cash did Lehnhoff Inc. have on its balance sheet at the end of 2002?arrow_forward
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