Question

In: Finance

Your client Vince just received an inheritance from his father. How would this be considered in terms of taxes?

Your client Vince just received an inheritance from his father. How would this be considered in terms of taxes?

  1. Regular income

  2. Non-taxable income

  3. Investment income

  4. Capital gains

Solutions

Expert Solution

Your client Vince just received an inheritance from his father . In terms of taxes , this income would be classified as :-

Answer :- ( b ) Non taxable income

Explanation :- inheritance received from family members is not subject to taxes . So, it is known as non taxable income .

Explanation for rejection of other points :-

( a ) Regular income means the income earned by wages, salaries , pension at fixed time period.

( c) Investment income is the income generated by investing in financial securities .

( d ) capital gains refers to increase in value of capital assets like financial assets or real estate assets .

So, the right option is :- ( b ) non taxable income

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his...
Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his will his desire that Jon invest at least 75% of the money in real estate (which is how Grandfather made his fortune). Jon is in the market for his first home. He plans to make a down payment of 20% of the home’s purchase price and finance the rest with a mortgage. Jon also wants to purchase some investment property in the form of...
Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his...
Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his will his desire that Jon invest at least 75% of the money in real estate (which is how Grandfather made his fortune). Jon is in the market for his first home. He plans to make a down payment of 20% of the home’s purchase price and finance the rest with a mortgage. Jon also wants to purchase some investment property in the form of...
Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his...
Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his will his desire that Jon invest at least 75% of the money in real estate (which is how Grandfather made his fortune). Jon is in the market for his first home. He plans to make a down payment of 20% of the home’s purchase price and finance the rest with a mortgage. Jon also wants to purchase some investment property in the form of...
Joseph Ray just received an inheritance of $42,125 from his great aunt. He plans to invest...
Joseph Ray just received an inheritance of $42,125 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 5.25% per year with quarterly compounding for 30 years, how much will he have accumulated? (Round off to the nearest dollar.)
Jon received a substantial inheritance from his deceased grandfather, who expressed in his will his desire...
Jon received a substantial inheritance from his deceased grandfather, who expressed in his will his desire that Jon invest at least 75% of the money in real estate. Jon is in the market for his first home and plans to make a down payment of 20% of the home's purchase price and finance the rest with a mortgage. Jon wants to purchase some investment property in the form of residential rental real estate and is thinking about starting a real...
Linda Roy received a $205,000 inheritance after taxes from her parents. She invested it at 6.5%...
Linda Roy received a $205,000 inheritance after taxes from her parents. She invested it at 6.5% interest compounded quarterly for 8 years. A year later, she sold one of her rental properties for $215,000 and invested that money at 5.5% compounded semiannually for 7 years. Both of the investments have matured. She is hoping to have at least $505,000 in 12 years compounded annually at 4.5% interest so she can move to Hawaii.
Linda Roy received a $205,000 inheritance after taxes from her parents. She invested it at 6.5%...
Linda Roy received a $205,000 inheritance after taxes from her parents. She invested it at 6.5% interest compounded quarterly for 8 years. A year later, she sold one of her rental properties for $215,000 and invested that money at 5.5% compounded semiannually for 7 years. Both of the investments have matured. She is hoping to have at least $505,000 in 12 years compounded annually at 4.5% interest so she can move to Hawaii. Future Value of Inheritance Investment: $ Future...
you just received an inheritance and are trying to decide between 3 options. your required return...
you just received an inheritance and are trying to decide between 3 options. your required return is 10.4%. please find the present value for each option. which option should you choose? A. $7,700 per year forever B. one payment of $32,000 today and one payment of $55,000 in 3 years. C. 102 weekly payments of $800, with the first payment to be made today. Assume there are 52 weeks in a year.
John received two properties from his deceased father (David) under a will. One property is a...
John received two properties from his deceased father (David) under a will. One property is a holiday house in Brisance and another is an investment property in Sydney. David has purchased the investment property in 1979 for $2.5m and he purchased the Brisbane property in 1990 for $2m. on the day that Davis passed ways each property had a market value of $5m. John wants to sell both properties. With reference to relevant legislation/case law discuss the CGT consequences of...
1) Future Value – Periodic Compounding You just received an inheritance from a distant relative of...
1) Future Value – Periodic Compounding You just received an inheritance from a distant relative of $100,000. You decide to invest it in a CD for 5 years that has a 1.60% interest rate (APR), compounded monthly. a) Using the appropriate formula, what will be your ending balance at the end of 5 years? (Show all work, you can’t just use the TVM calculator) b) How much interest will you earn? (Show your work) c) Create a spreadsheet that gives...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT