ABC Limited located in a country which has capital gains tax, conducted the following transactions: Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2,800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1million. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021. The company is entitled to an Annual Exemption of $500,000. Capital losses as of 1 January 2021 was $1,500,000. Calculate the capital gains tax in 2021, assuming a capital gain tax of 20%. $2,000,000 $1,400,000 $1,100,000 $600,000
ABC Limited located in a country which has capital gains tax, conducted the following transactions: Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2,800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1million. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021. The company is entitled to an Annual Exemption of $500,000. Capital losses as of 1 January 2021 was $1,500,000. Calculate the capital gains tax in 2021, assuming a capital gain tax of 20%. $2,000,000 $1,400,000 $1,100,000 $600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
- ABC Limited located in a country which has
capital gains tax , conducted the following transactions: - Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2,800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000.
- A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million.
- Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1million.
- Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021.
The company is entitled to an Annual Exemption of $500,000. Capital losses as of 1 January 2021 was $1,500,000.
Calculate the capital gains tax in 2021, assuming a
- $2,000,000
- $1,400,000
- $1,100,000
- $600,000
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