Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Question
Chapter 9, Problem 1TPC
To determine
Discuss the tax implications of each of the courses of action and select the course that can be recommended to Firm NS.
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5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers
a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax
consequences to all of the parties?
(b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 50%
of the stock. How would this change your answer?
How to Compute for the fringe benefits tax due in the scenarios.
In 2018, Delta Corporation bought a condominium unit on installment for the use of its executive. The acquisition cost inclusive of 12% interest is P6,720,000. The fair market value of the property per tax declaration is P6,800,000, while the zonal value is P6,500,000. How much is the fringe benefits tax? Assuming that the ownership over the property will be transferred to the executive, how much is the fringe benefits tax?
Firm E must choose between two alternative transactions. Transaction 1 requires a $9,150 cash outlay that would be nondeductible in
the computation of taxable income. Transaction 2 requires a $14,800 cash outlay that would be a deductible expense.
Required:
a. Determine the after-tax cost for each transaction. Assume Firm E's marginal tax rate is 25 percent.
b. Determine the after-tax cost for each transaction. Assume Firm E's marginal tax rate is 45 percent.
Chapter 9 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 9 - Prob. 1QPDCh. 9 - Prob. 2QPDCh. 9 - Prob. 3QPDCh. 9 - Prob. 4QPDCh. 9 - Prob. 5QPDCh. 9 - Prob. 6QPDCh. 9 - Prob. 7QPDCh. 9 - Prob. 8QPDCh. 9 - Prob. 9QPDCh. 9 - Explain the difference between a substituted basis...
Ch. 9 - Prob. 11QPDCh. 9 - Prob. 12QPDCh. 9 - Prob. 13QPDCh. 9 - Prob. 14QPDCh. 9 - Prob. 15QPDCh. 9 - Prob. 1APCh. 9 - Prob. 2APCh. 9 - Prob. 3APCh. 9 - Prob. 4APCh. 9 - Prob. 5APCh. 9 - Prob. 6APCh. 9 - This year, Neil Inc. exchanged a business asset...Ch. 9 - Prob. 8APCh. 9 - Prob. 9APCh. 9 - XYZ exchanged an old building for a new like-kind...Ch. 9 - Prob. 11APCh. 9 - Prob. 12APCh. 9 - Prob. 13APCh. 9 - Prob. 14APCh. 9 - Prob. 15APCh. 9 - Prob. 16APCh. 9 - Prob. 17APCh. 9 - Prob. 18APCh. 9 - Prob. 19APCh. 9 - On October 18 of last year, a flood washed away...Ch. 9 - Prob. 21APCh. 9 - Prob. 22APCh. 9 - Prob. 23APCh. 9 - Mr. ZJ owns a sole proprietorship. The business...Ch. 9 - Prob. 25APCh. 9 - Prob. 26APCh. 9 - Prob. 27APCh. 9 - Prob. 28APCh. 9 - Prob. 29APCh. 9 - Prob. 30APCh. 9 - Prob. 31APCh. 9 - Prob. 32APCh. 9 - Prob. 33APCh. 9 - Prob. 34APCh. 9 - Prob. 1IRPCh. 9 - Prob. 2IRPCh. 9 - Prob. 3IRPCh. 9 - Prob. 4IRPCh. 9 - Prob. 5IRPCh. 9 - Prob. 6IRPCh. 9 - Prob. 7IRPCh. 9 - Prob. 8IRPCh. 9 - Prob. 9IRPCh. 9 - Prob. 10IRPCh. 9 - Prob. 1RPCh. 9 - Prob. 2RPCh. 9 - Prob. 3RPCh. 9 - Prob. 1TPCCh. 9 - Prob. 2TPCCh. 9 - Prob. 3TPCCh. 9 - Croyden is a calendar year, accrual basis...
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- 5. (a) A transfers a contract to perform services to Newco in exchange for 50% of Newco's stock. B transfers a tract of land with a basis of 50 and FMV of 100 in exchange for 50% of Newco's stock. What are the tax consequences to all of the parties? (b) Suppose that in addition to transferring the services contract, A transfers cash of 20. A still receives 5096 of the stock. How would this change your answer? () Suppose instead that in addition to transferring the services contract, A transfers cash of just 1 How would this change your answer?arrow_forwardThe Abelinda Estate distributed some land, basis of $15,500 and fair market value of $18,000, to beneficiary Bartholomaus. The estate is subject to a 28% marginal income tax rate, and Bartholomaus is subject to a 32% marginal rate. What are the tax savings if the executor of the estate elects that the entity recognize the related realized gain? Please note that I came up with $125 & it is incorrect.arrow_forwardLake Life, Inc., a C corporation, owns a single asset with a basis of $250,000 and a fair market value of $500,000. Lake Life elects S corporation status. Lake Life holds a positive E & P balance. The entity elects S corporation status for 2019 and then sells the asset. What are the corporate-level built-in gains taxes that must be paid by Lake Life? Answer: $____________arrow_forward
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