Question

In: Accounting

1. Indicate below whether each activity would be nontaxable or taxable (subject to UBTI) for a...

1. Indicate below whether each activity would be nontaxable or taxable (subject to UBTI) for a tax exempt investor: "U" = subject to UBTI "N" = nontaxable

_____ Single family home real estate development and sale

_____ Operating income from a nursing home

_____ Condominium sales in the ordinary course of a business

_____ Capital gain distributions from a REIT

_____ Interest income on a loan from a wholly owned US corporation

_____ Dividends from a corporation where the investment was made with borrowed money

_____ Daily parking fees for customers who may or may not be tenants

_____ Ordinary dividends from a REIT

2. List 5 requirements to qualify as a REIT:

1 ________________________________

2 ________________________________

3 _________________________________

4 _________________________________

5 _________________________________

Solutions

Expert Solution

1. Single family home real estate development and sale - UBTI

2. Operating income from a nursing home - "Non Taxable"

3. Condominium sales in the ordinary course of a business -"Non taxable"

4. Capital gain distributions from a REIT - "Taxable in the hands of receiver"

5. Interest income on a loan from a wholly owned US corporation - "Non Taxable"

6. Dividends from a corporation where the investment was made with borrowed money -"Nontaxable" but there will be no tax exemption for the interest paid on the loan

7. Daily parking fees for customers who may or may not be tenants - "UBTI"

8. Ordinary dividends from a REIT -"Non Taxable"

B. 5 requirements to qualify as a REIT:

i.The company must Invest at least 75% of its total assets in real estate assets and cash

ii. The company must derive at least 75% of its gross income from real estate related sources, including rents from real property and interest on mortgages financing real property;

iii. The company must distribute at least 90% of its taxable income to shareholders annually in the form of dividends.

iv. The company must have centralized management.(i.e controlled by Board of Directors/trustees)

v. The shares must be transferable.

vi. The company must not be closely held( i.e it should have a minimum of 100 shareholders after its first year as a REIT, not a compulsion for its first year)

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

ABC Worksheet For each of the situations below, indicate whether the activity is a(n) unit-level activity,...
ABC Worksheet For each of the situations below, indicate whether the activity is a(n) unit-level activity, batch-level activity, product sustaining activity or facility-level activity. If you feel necessary, add a BRIEF explanation as to your rationale. Maintenance of parts inventory for Malibu Barbie in a Mattel toy factory Cost of an adjunct professor’s salary for a night class The review of each tax return by a supervisor at H&R Block Cost of oil filters at Jiffy Lube Cost of safety...
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...
1. For each of the following items, indicate whether it would be classified as an (O)...
1. For each of the following items, indicate whether it would be classified as an (O) operating activity, an     (I) investing activity, a (F) financing activity, or a significant (N) noncash investing or financing activity. __________Received cash dividends from an investment in the stock of another corporation. __________Collected accounts receivable from customers. __________Issued bonds payable for cash. __________Paid wages to employees. __________Issued stock for cash. __________Sold equipment for cash. __________Purchased land in exchange for a note payable. __________Paid cash...
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...
1. For each item below, indicate whether it involves: (1) A temporary difference that will result...
1. For each item below, indicate whether it involves: (1) A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. (2) A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. Use the appropriate number to indicate your answer for each. Answer (a) For some assets, straight-line depreciation is used for tax purposes while double-declining balance...
1. In each of A-C, below, indicate whether: a) the statement is possible under the laws...
1. In each of A-C, below, indicate whether: a) the statement is possible under the laws of thermodynamics; b) the statement violates the First Law; c) the statement violates the Second Law. In the case of a Second Law violation, circle the name of the scientist whose version of the second law is most simply and obviously broken. In each case there is a best name, but feel free to explain your choice. (Adapted from Bill Reinhardt.) A. A novel...
1). Indicate whether the object will remain in circular motion or not for each case below....
1). Indicate whether the object will remain in circular motion or not for each case below. Show a calculation as proof. If it doesn’t stay in circular motion, state what happens to it. a). A car traveling at a speed of 24 m/s around an unbanked curve with a radius of curvature of 108 m and a coefficient of static friction of 0.36 . b). A person riding in a roller coaster car as it goes over the top of...
1. For each of the following reactions, indicate whether you would expect the entropy of the...
1. For each of the following reactions, indicate whether you would expect the entropy of the system to increase or decrease, and explain why. If you cannot tell just by inspecting the equation, explain why. a.CH3OH(l) CH3OH(g) b.N2O4(g) 2NO2(g) c. CO(g) + H2O(g) CO2(g) + H2(g) d.2KClO3(s) 2KCl(s) + 3O2 (g) e.2NH3(g) + H2SO4(aq) (NH4)2SO4(aq) 2. Predict which of the following reactions has a positive entropy change. I. 2 N2(g) + O2(g) à 2 N2O(g) II. CaCO3(s) à CaO(s) +...
For each of the questions below, a histogram is described. Indicate in each case whether, in...
For each of the questions below, a histogram is described. Indicate in each case whether, in view of the Central Limit Theorem, you can be confident that the histogram would look like approximately a bell-shaped (normal) curve, and give a brief explanation why (one sentence is probably sufficient). There are no data for these questions, so you will not need to use the computer to answer these questions. A police department records the number of 911 calls made each day...
For each of the questions below, a histogram is described. Indicate in each case whether, in...
For each of the questions below, a histogram is described. Indicate in each case whether, in view of the Central Limit Theorem, you can be confident that the histogram would look like approximately a bell-shaped (normal) curve, and give a brief explanation why (one sentence is probably sufficient). 1. The price of one gallon of gasoline at a particular gas station is recorded every day of the year, and the 365 values are plotted in a histogram. 2. Two hundred...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT