Homework Answers
Answer
Jane recognizes a gain of $75000
Gain = $500,000 - $425,000 = $75,000
Under 351 ,tax free transfers to controlled corporations is allowed to individuals or businesses .No gain or loss shall be recognized if property is transferred to a corporation by one or more persons. In other words, Jane can transfer assets to Green Corporation without recognizing any gain or loss.
Since Jane received some money from this transaction (long term note for $75,000), that must be considered a gain since it is not included
under 351.
condiition allows on income from house property.
- There must be a constructed house property.
- Such property must be let out during the previous year.
- Such property must be owned by the Assessee during the previous year.
Exemption Regarding Income From House Property
there are two kinds of exemptions:
1 Fully Exempted Income
- Income from farm house
- Annual Value of one palace of ex-Indian Ruler
- Income from property owned by:
Local authority
Scientific Research Association
Trade union
Charitable trust
Political party
- Income from property used for assessee's own business or profession
- Income from one self-occupied house
- Income from house meant for self-residence but could not be occupied throughout the previous year on account of his service business or profession at any other palace.
2 Deductible from Gross total income
- Income of a co-operative society from the letting of godowns or warehouse for storage of commodities meant for sale.
- Income of a co-operative society from house property , provided gross total income does not exceed Rs 20000 and the society is not a housing society, urban consumers' co-operative society, transport society or society manufacturing goods with the aid of power.
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