ZuoTi.Pro
Question

During the current year L sold his business and received $400,000 for its related franchise. The...

During the current year L sold his business and received $400,000 for its related franchise. The franchise had an original cost of $300,000 and its UCC at the beginning of the current was $180,000. What is the total amount that is included in L’s net income for tax purposes in the current year with respect to the sale of the franchise?

business   accounting   
0 1
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Compute Ls net income for tax purose in the current year as follows: Net Income for tax purpose=Sale proceeds - UCC = $400,0

0 2
Add a comment
Know the answer?
Add Answer to:
During the current year L sold his business and received $400,000 for its related franchise. The...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • During the current year D sold a property in class 12 for $9,000. The property had...

    During the current year D sold a property in class 12 for $9,000. The property had an original cost of $12,000. At the beginning of the current year the UCC of class 12 was $5,000. No other class 12 transactions occurred during the year. What is the increase to D’s net income for tax purposes, if any, for the current year as a result of the sale?

  • During the current year M sold all of her class 10 property to Q Inc., a...

    During the current year M sold all of her class 10 property to Q Inc., a corporation controlled by M. The property, which originally cost $120,000, was valued at $60,000. The UCC of class 10 at the beginning of the current year was $80,000. What is the amount of the decrease to M’s net income for tax purposes, if any, for the current year as a result of the sale of the class 10 property?

  • Income Statement Sections During the current year, David Corporation sold a segment of its business at...

    Income Statement Sections During the current year, David Corporation sold a segment of its business at a gain of $210,000. Until it was sold, the segment had a current period operating loss of $75,000. The company had $700,000 income from continuing operations for the current year. Prepare the lower part of the income statement, beginning with the $700,000 income from continuing operations. Follow tax allocation procedures, assuming that all changes in income are subject to a 20 percent income tax...

  • A company is considering selling one of its two factories used in its business in Canada....

    A company is considering selling one of its two factories used in its business in Canada. The building was aquired in 2016 at a cost of $1,00,000 and is allocated to a seperate class 1 for CCA purposes, which had a UCC balance of $800,000 at the begining of the year. Which of the following statements is correct with respect to the tax consequences that would arise in connection with the proposed sale of the building: a)If the building were...

  • CANADIAN TAXATION 2019 During the current year, R received a salary of $80,000. She also earned...

    CANADIAN TAXATION 2019 During the current year, R received a salary of $80,000. She also earned commissions of $30,000 of which $20,000 was received in the current year. The remaining commissions were paid in January of the following year. What is R's employment income for the current year? $ M is employed in the soft drink industry. In addition to his salary, he enjoyed the following benefits paid for by his employer in the current year: Contribution to company pension...

  • On the last day of its current tax year, Buy Rite LLC received $170,000 when it...

    On the last day of its current tax year, Buy Rite LLC received $170,000 when it sold a machine it had purchased for $60,000 three years ago to use in its business. At the time of the sale, the basis in the equipment had been reduced to $10,000 due to tax depreciation taken. How much did the members’ self-employment earnings from Buy Rite increase when the equipment was sold? [Hint: See §1402(a)(3).] Self Employment earnings increase by: a. $10,000 b....

  • **For tax year 2018** During the current year, an office desk used by Pat in his...

    **For tax year 2018** During the current year, an office desk used by Pat in his business was completely destroyed by a fire. The adjusted basis of the desk was $900 (original cost of $1,500 less accumulated depreciation of $600). Pat received $500 from his insurance company, but he did not replace the desk. a. What is the amount of Pat's recognized gain or loss (deduction) as a result of the casualty? b. Assuming this is Pat's only casualty gain...

  • The Brady Partnership had an ordinary operating loss of $400,000 for the current year. Lonnie has...

    The Brady Partnership had an ordinary operating loss of $400,000 for the current year. Lonnie has a 30% interest in the partnership, and he materially participates in the partnership's business. At the beginning of the year, Lonnie's adjusted basis in the partnership was $50,000. During the year, the partnership borrowed $100,000, which was the only outstanding debt at year end. Both partners are personally liable for the partnership's debt, and there are no special agreements. What amount can Lonnie claim...

  • Michael received the following amounts during the current tax year of 2020. For each item indicate...

    Michael received the following amounts during the current tax year of 2020. For each item indicate how much is included in his 2020 federal gross income. (14 points) a)  A cash inheritance of $11,000 from his grandmother’s estate. b)   $50,000 lump sum cash payment (in 2020) from an elderly neighbor’s life insurance policy. The women died during 2019. Michael was named as the beneficiary even though they were not related. c)   $2,000 from a PA lottery ticket. d)  $5,000 in child support...

  • Ken sold a rental property for $860,000. He received $128,000 in the current year and $183,000...

    Ken sold a rental property for $860,000. He received $128,000 in the current year and $183,000 each year for the next four years. Of the sales price, $582,500 was allocated to the building and the remaining $277,500 was allocated to the land. Ken purchased the property several years ago for $660,000. When he initially purchased the property, he allocated $570,000 of the purchase price to the building and $90,000 to the land. Ken has claimed $15,000 of depreciation deductions over...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT