What is income? in each of the following situations indicate whether taxable income should be recognized....

What is income? in each of the following situations indicate whether taxable income should be recognized. a) Q purchased an older home for 30,000. Shortly after its purchase, the area in which it was located was designated a historical neighborhood, causing its value to rise to 50,000 b) R, a long term employee of XYC, purchased one of the company's cars worth 7,000 for 3,000. c) I borrowed 10,000 secured by property that had an adjusted basis of 3,000 and a fair market value of 15,000 d)S, a 60% shareholder in STV Corporation, uses a company car 70% of the time for business and 30% for personal purporses. The rental value of the car is 350 per month

Solutions

Expert Solution

Income is money that an individual or business receives in exchange for providing goods and/or services or through investments. Income can be which has been received or which has earned but not receive.

In accounting, we consider only that income which has been realised and not unrealised income.

Taxability of the following

A) cost to purchase the house is 30,000 and Current value is 50,000. there is a unrealised gain on the house is 20,000. but it won't be considered for tax as it has not been realised yet.

B) Mr. R has purchased a company's car worth 7,000 for 3,000, in this case difference i.e. 4,000 would be considered as perquisit and would be taxable in the hands of Mr R.

C) borrowing is not a income as it is paid back after some time with interest. hence borrowing of 10,000 won't be considered as income.

D) Mr S uses a company car 70% for business and 30% for personal purpose. monthly rent of car is 350. in this case, 350*30% i.e. 105 would be considered as perquisit and would be taxable in the hands of Mr S.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

For each of the following situations, indicate whether the organization should recognize the described contributed services...

For each of the following situations, indicate whether the organization should recognize the described contributed services as revenue (offset by a corresponding expense). Briefly justify your response or identify key issues. 1. Nellie Wilson, the noted country-and-western singer, performs a benefit concert for the Save Our Farms Association, a political advocacy group. Wilson, who would normally charge $60,000 per concert, did not accept a fee. 2. Camp Chi-Wan-Da, a summer camp for disadvantaged youth, benefits from the services of four...

Compute 2018 taxable income in each of the following independent situations.

Compute 2018 taxable income in each of the following independent situations.a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent children, they have AGI of $125,000 and itemized deductions of $27,000.b. Sybil, age 40, is single and supports her dependent parents, who live with her. Sybil also supports her grandfather, who lives in a nursing home. She has AGI of $80,000 and itemized deductions of $8,000.c. Scott, age 49,...

Signify YES or NO as applicable for each of the following situations to indicate whether the...

Signify YES or NO as applicable for each of the following situations to indicate whether the situation would result in the net book value of bonds payable EQUALING the balance of the bonds payable ledger account. - A. B. The bonds were issues at face value. - A. B. The bonds were issued at a premium. - A. B. ...

For each of the following situations, indicate the amount of income, if any, that would be...

For each of the following situations, indicate the amount of income, if any, that would be taxable in the year 2020: A. R found a box while jogging near her home. In the box was $100,000. R reported the find to the police, but because the owner could be found, R was allowed to keep the money. B. W purchased 10 acres of land for $100,000. Shortly after the purchase it was discovered that oil was present beneath the ground....

a) In each of the following situations, indicate whether the potential bias is a selection bias,...

a) In each of the following situations, indicate whether the potential bias is a selection bias, a nonparticipation bias, or a response bias. Explain how this is an example of the particular type of bias in a complete sentence. In a college town, college students are hired to conduct door to door interviews to determine whether city residents think there should be a law forbidding loud music at parties. A magazine sends a survey to a random sample of its...

For each of the following situations, indicate whether ANOVA is appropriate; if not appropriate, the reason...

For each of the following situations, indicate whether ANOVA is appropriate; if not appropriate, the reason why not; and, if appropriate, the type of ANOVA that would be used (i.e., one-way, repeated measures, etc.): The independent variable (IV) is age group –people in their 60s, 70s, and 80s; the dependent variable (DV) is health-related hardiness, as measured on a 20-item scale. The IVs are ethnicity (white, African American, Hispanic, Asian) and birthweight status (<2,500 grams vs 2,500 grams); the DV...

Indicate whether each of the following transfers by Connie constitute a taxable gift, and if so...

Indicate whether each of the following transfers by Connie constitute a taxable gift, and if so give the amount of the gift. Explain your answer. Assume unless stated otherwise that Connie is not married, and in each case, it is the only transfer to that person during the year. a) $16,000 transferred to Connie’s sister. b) $25,000 is given to Connie’s alma mater Mont State University c) $30,000 is paid to the local hospital for medical bills for Connie’s best...

For each of the following situations, indicate the amount of revenue that the government should recognize...

For each of the following situations, indicate the amount of revenue that the government should recognize in an appropriate governmental fund as well as in its government-wide statement of activities in its fiscal year ending December 31, 2021. Briefly justify your response, making certain that, as appropriate, you identify the key issue of concern. 1. In October 2020, a state received a federal grant of $300 million (in cash) to assist local law enforcement efforts. The federal government has established...

27.) Compute the taxable income for 2018 in each of the following independent situations: a.) Drew...

27.) Compute the taxable income for 2018 in each of the following independent situations: a.) Drew and Meg ages, 40 and 41, respectively are married and file a joint return. In addition to four dependent children, they have AGI 125,000 and itemized deductions of 27,000. b.)Sybil, age 40 is single and supports her dependent parents who live with her, as well as her grandfather who is in a nursing home. She has AGI of 80,000 and itemized deductions of 8,000...

C. For each of the following situations, (1.) indicate whether you agree or disagree with the...

C. For each of the following situations, (1.) indicate whether you agree or disagree with the financial reporting practice employed, then (2.) name the accounting concept being properly employed, or name the accounting concept being violated. (more than one answer may be appropriate) Loser Corporation did not disclose that it was the defendant in a material lawsuit because thetrial was still in progress. Alliant Semiconductor Corporation files quarterly and annual financial statements with the SEC. Reliant Pharmaceutical Inc. issues financial...

Subjects