ack purchases a house for $90,000 and spends $15,000 to renovate it. He holds the house for 35 years and then sells it in the middle of a real estate bubble for $400,000. How much of that amount does he have to pay taxes?
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ack purchases a house for $90,000 and spends $15,000 to renovate it. He holds the house for 35 years and then sells it in the middle of a real estate bubble for $400,000. How much of that amount does he have to pay taxes?
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- Olivia wants to buy some vacant land for investment purposes. She cannot afford the full purchase price. Instead, Olivia pays the landowner $51,900 to obtain an option to buy the land for $1,038,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $64,875. What is the amount and character of Olivia's gain or loss? She has a long-term capital gain of $ .Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years ago for $480,000 and didn't have any adjustments to factor in. If Aaron and Melissa sell their house for $700,000, how much will they have to pay in capital gains? O $700,000. Married couples are required to pay capital gains on the final sales price. O $220,000. All sellers have to pay capital gains on the sales price minus the price they originally paid. O $0. The $500,000 capital gains exclusion will allow them to write off any profits earned on the property. $0. Capital gains is only paid on commercial properties.When Barry’s grandmother passed away, she gave Barry a diamond ring that was worth $6,000 at the time of death. Barry’s grandmother had purchased the ring for $5,400. What is Barry’s basis in the ring if he sells it for $7,000? What if he sells it for $5,000? What if he sells it for $5,800?
- Jack paid $5,000 in daycare expenses in 2022 for his five-year-old daughter so he could work. His AGI for the year was $37,500 (all earned income). What is the amount of his child and dependent care credit? Jack meets the love of his life, Jill, and they quickly marry. Jill’s earned income mirrors Jack’s at $37,500, so in 2022, Jack quits working and stays home to play video games. If Jack and Jill are MFJ with AGI of $37,500 in 2022, and Jack’s daughter continues to incur $5,000 in dependent care expenses, how much will their dependent care credit be? Show your work, or explain your answer.On Robin’s birthday, his grandmother gave him a ring that was worth $6,000 at the time of the gift. Robin’s grandmother had purchased the ring for $5,400. What is Robin’s basis in the ring if he sells it for $7,000? What if he sells it for $5,000? What if he sells it for $5,800? fill in the blank regardless of sales priceLast year Jones obtained a mortgage loan for $100,000. He just inherited a large sum of money and is contemplating prepaying the entire loan balance to save interest. What are his rights to prepay the loan?
- Olivia wants to buy some vacant land for investment purposes. She cannot afford the full purchase price. Instead, Olivia pays the landowner $43,100 to obtain an option to buy the land for $862,000 anytime in the next four years. Fourteen months after purchasing the option, Olivia sells the option for $53,875. What is the amount and character of Olivia's gain or loss? She has of $Louis wins the Lottery and, after taxes, gets to keep $3 million. He quits his job, buys a house and begins to gamble. He usually loses and after 4 years he is behind in his mortgage, had his car repossessed and has over $600k in loans secured by his house. What is the only chapter he can file under for bankruptcy?Ms. Brown purchases a house for $300,000. She borrows $200,000 from a mortgage company at the rate of 4.5%. Consider interest paid on the loan as only cost of borrowing to Ms. Brown. She rent the property for $2,000 a month. She pays $6,000 property tax per year. The house maintenance costs each year is about $3,000. After 5 years she sells the property for $400,000. What is Ms. Brown’s average annual rate of return on this investment.
- Jenny and Jerry have a home with a fair market value of $625,000. They borrowed $400,000 ten years ago to purchase the home. They currently owe $250,000 on the acquisition loan. They recently borrowed $110,000 on a home-equity loan. The proceeds were used to purchase a car, take a vacation, and redecorate their home. What is the maximum amount of their indebtedness that can generate deductible interest in the current year?Dave bought a rental property for $550,000 cash. One year later, he sold it for $530,000. Suppose Dave invested only $75,000 of his own money and borrowed $475,000 interest-free from his rich father. What was his return on investment?Olivia wishes to purchase some undeveloped land for investment purposes. She is unable to pay the whole purchasing price. Instead, Olivia pays the landowner $51,900 in exchange for the right to purchase the land for $1,038,000 at any time over the following four years. Olivia sells the option for $64,875, 14 months after obtaining it. What is the size and nature of Olivia's gain or loss? She has a $ lengthy capital gain.
