Question

True/False Give a brief explanation for your answer

____    1.   The purpose of the work opportunity tax credit is to encourage employers to hire individuals from specified target groups traditionally subject to high rates of unemployment.

____   2.   Molanda sells a parcel of land for $45,000 in cash and the buyer assumes Molanda’s mortgage of $20,000 on the land. Molanda pays a real estate agent $3,000 on the trasnaction. Molanda’s amount realized is $62,000.

____    3.   Cassie purchases a sole proprietorship for $155,000. The fair market value of the tangible assets is $115,000 and the agreed to value of goodwill is $10,000. Assuming there are no other intangible assets, Cassie’s basis for the tangible assets is $115,000 and her basis for the goodwill is $10,000.

____    4.   Sam purchased an SUV for $52,000 which he uses 100% for personal purposes. When the SUV is worth $19,000, he contributes it to his business. The gain basis is $52,000, the loss basis is $19,000, and the basis for cost recovery is $19,000.

Answer 1

Answer 1:

The given statement is true.

The purpose of work opportunity credit is to encourage employer to hire individuals who were facing barriers to employment and consequently subject to high rates of unemployment.

Answer 2:

The given statement is False.

Realized gain = Cash received + Cost borne by purchaser - (Cost of the property + Sales commission)

= $45,000 + $20000 - ($20,000+$3,000)

= $65,000 - $23,000

= $42,000

Answer 3:

The given statement is True.

Goodwill can't be esteemed straightforwardly. Particularly inside created generosity. Eg. In the event that I ask what is the XYZ organization estimation of altruism we can't put a figure to it. When any individual who is completing a business bargain you pay for what you get. Eg. You purchase a chocolate its cost is settled – this is a case of tangible assets

Along these lines, for this situation, in the event that you have paid more than what you have getting and still you say it's a business exchange it won't bode well.

Subsequently, in business, we tell that the purchaser is getting something more than simply tangible assets which will profit him in future (this is intangible).

Subsequently, any sum paid well beyond the honest estimation of assets is considered as goodwill.

Answer 4:

The given statement is True.