Troy (single) purchased a home in Hopkinton, MA, on January 1,2007, for $300,000. He sold the home on January 1, 2016, for$320,000. How much gain must Troy recognize on his home sale ineach of the following alternative situations? d. Troy rented thehome from January 1, 2007, through December 31, 2011. He lived inthe home as his principal residence from January 1, 2012, throughDecember 31, 2012. He rented out the home from January 1, 2013,through December 31, 2013, and lived in the home as his principalresidence from January 1, 2014, through the date of the sale.Assume accumulated depreciation on the home at the time of sale was$0. Gain recognized? The answer is not $28,571 The answer is not$4,375
Time difference from the "Purchase date" to "Sale date" = 9 years (1/1/2007 to 1/1/2016)
Given that, in the 9 years, Troy rented the home for first 5 years (1/1/2007 to 1/1/2012), and lived in the home as his principal residence for next 1 year(1/1/2012 to 31/12/2012)
and again rented out the home for 1 year (1/1/2013 to 31/12/2013), and again started to lived in the home as his principal residence for next 2 years. (1/1/2014 to 1/1/2016)
i.e. when we look at the last 5 years before the sale of house, Troy has lived 3 years in the home as his principal residence.
And Troy has acquired the home for $300,000 and not acquired by "like kind exchange" of property.
As per IRS rules, a owner must live at least 2 years in the home as his principal residence & home must not be acquired by 1031 exchange (like/kind exchange).
Here, Troy satisfies both conditions. (He has lived more than 2 years, and not acquired by like/kind exchange)
So, as per above rules, Troy's home sale is eligible for Maximum exclusion of $250,000 gain (being Troy is Single)
Here, as per IRS rules, Gain = Amount Realized / Adjusted Basis = $320,000 - $300,000 = $20,000.
But, being Troy home sale is eligible for Maximum exclusion of $250,000, this $20,000 gain is deducted and Net Gain = $0.
Troy's gain on the sale of his home is $20,000. However, he is eligible to exclude this gain from taxation because he lived in the home as his principal residence for 2 out of the 5 years leading up to the sale, as per IRS guidelines.
Troy's gain on his home sale depends on his usage of the property and the IRS's rules on excluding gains from the sale of a principal residence. According to these rules, a person can generally exclude the gain up to $250,000 from the sale of a principal residence if they owned the house and lived in it as their main home for at least 2 out of the last 5 years before the sale. The years of ownership and use don't need to be consecutive.
Troy purchased the home in 2007 and sold it in 2016. He rented the home initially then lived in it as his principal residence, then rented it again, and lived in it again until the sale. Combining these periods, he lived in the house as his principal residence for only 3 years (2012, 2014, 2015). However, these years are within the 5-year window before the sale (2012-2016).
Troy's recognized gain is the selling price of the home minus the purchase price. Thus, his recognized gain is $320,000 - $300,000 = $20,000. However since he lived in the residence for 2 out of the 5 years before the sale, this gain is excluded from taxation, according to IRS rules.
The vice president of marketing tells a marketing manager to prepare a presentation by the end of the week. The vice president is most likely exercising which of the following? staff authority line authority functional authority procedural authority
Line authority refers to the power or authority assigned to individuals of supervisory position so as to direct and initiate employees to action in a desired manner, with the purpose of accomplishment of organizational goals and objectives.
For example, production manager may exercise line authority and supervise and direct production activities and subordinates.
In the given case, the vice president(VP) of a department i.e marketing tells marketing manager to prepare a presentation by the end of the week. Here, the VP is exercising his line authority, thereby supervising and directing the subordinates towards an action, carried out in organizational interest.
You are the supply chain manager for a small company that makes customized road bicycles. YouCEO asks you to explain the steps in the process for manufacturing and delivering the product to consumers, in your supply chain. Use the module content and Better Business to explain the steps i the process, in four to five sentences minimum. HTML Editora
The points are as follows:-
1. Their preparations must be successful, and their implementation from the highest to the lowest managerial level is necessary.
2.We need to handle the whole project schedule acquisition process.
3.They ought to manage the sales contract for the finished product and the materials and machinery.
4.Prepare its manual data or auto-metrically produced purchase agreement from the line as well as from the planning process.
Consumption spending is:__________ A. spending by households, businesses, and government on all goods used up within one year. B. spending by individuals and households on both durable and nondurable goods. C. spending on goods and services by heads of households. D. spending by individuals and households on only nondurable goods, since they are used up quickly.
b. spending by individuals and households on only non-durable goods.
Consumption spending is spending by individuals and households on only non-durable goods. Consumption is a component of GDP which includes spending on goods and services by individuals and households as it includes non-durable as well as durable goods on the basis of consumption patterns.
E18-20 (LO3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these seeds on account for $1,500,000 (cost $750,000) on January 2, 2017. Customers are required to pay the full amount due by March 15, 2017.Prepare the journal entry for Organic Growth at January 2, 2017.
Debit: Accounts receivable with 1,500,000
Sales account with 1,500,000
Journal entry for Organic Growth at January 2, 2017 will appear in the book as follows:
Details DR ($) CR ($)
Accounts receivable 1,500,000
Sales account 1,500,000
Being the sales of Organic Growth on credit
The president of the American Auto Parts Corporation recently testified before members of Congress, urging them to limit the flow of imported automobile parts into the United States. She contended that these imports were priced lower than the foreign producers were charging for the same parts in their own countries. She believes these foreign producers are guilty of _______.
The correct answer is: Dumping.
Dumping refers to exporting a good at a lower price than the price charged for the goods at home. Involves substantial volumes of the exported product and endangers manufacturers and producers in the importing nation. The World Trade Organization states that dumping is unfair competition but most countries condemn it. Dumping is legal under the World Trade Organization rules unless the country can prove it has negative effects.
Fox Co. sold used equipment for a cash amount equaling its carrying amount for both book and tax purposes. Later that year, Fox replaced the equipment by paying cash and signing a note payable for new equipment. The cash paid for the new equipment exceeded the cash received for the old equipment. How should these equipment transactions be reported in Fox's statement of cash flows? Group of answer choices
The correct answer is letter "B": Cash inflow equal to the cash received and a cash outflow equal to the cash paid.
The cash inflow equals to the amount of money received for the old equipment sold and cash outflow equivalent to the money paid for the brand new equipment. The note payable is not a cash outflow, and the cash outflow received should not be decreased.