Mr Winston entered into an agreement that gave him the right to purchase stationery for R12 000. This stationery normally costs R17 000. Mr Winston has not exercised the option by the end of the year of assessment. Mr Winston will not be able to deduct this amount because he did not consider the option during the current year of assessment and therefore he created a liability for himself. Select one: O True O False
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- help meD is indebted to C for P10,000. For the purpose of defrauding C, D sold his only parcel of land to X valued P10,000. X has no knowledge of the intention of D. a. The contract D and X is binding. b. The contract is voidable because S is in bad faith. c. The right of C is to rescind the contract because the transaction is fraudulent. d. The contract between D and X is rescissible.-G, guardian of M, sold the latter’s parcel of land worth P100,000 for only P90,000. Is the contract rescissible? Explain. -X orally sold his lot to Y for P500,000 and the latter gave an earnest money in the amount of P50,000 which the former acknowledged in a receipt. Later on, X refused to comply with the contract. Can Y enforce the contract against X? Explain.
- S (debtor) is indebted to T (creditor) in the amount of PhP50,000.00. S proposed to T that Y will be the one to pay the debt, making him (Y) as the new debtor. T agreed to the proposal. It turned out, however, that Y is insolvent so T was not able to collect the amount due from Y. Question: Can T enforce the obligation to S, given the insolvency of Y? Explain your answer.S (debtor) is indebted to T (creditor) in the amount of PhP50,000.00. S proposed to T that Y will be the one to pay the debt, making him (Y) as the new debtor. T agreed to the proposal. It turned out, however, that Y is insolvent so T was not able to collect the amount due from Y. Question: Can T enforce the obligation to S, given the insolvency of Y? ExplainLisa sells business property with an adjusted basis of $138,900 to her son, Alfred, for its fair market value of $111,120. If an amount is zero, enter "0". a. What is Lisa's realized and recognized gain or loss? Lisa has a $ realized loss of which $ is recognized. b. What is Alfred's recognized gain or loss if he subsequently sells the property for $152,790? For $90,285? If Alfred sells the property for $152,790, he has a recognized gain If Alfred sells the property for $90,285, he has a recognized loss of $ ✓of $
- Decker has a $1,000 loss from an activity in which he materially participates. He has $500 of basis in the activity and his at risk basis is $300. How much of the $1,000 loss may Decker deduct against ordinary income? 300 1000 500 0A binds himself to give P10,000 to B upon the death of the father of A. Is the obligation of A conditional or one with a period? L (seller) sold his TV set to M (buyer), who gave L the option to deliver instead his refrigerator. Is L liable to M in case the TV is lost through L’s fault?Ferris owns an interest in, but does not materially participate in, an activity. He has $30,000 at-risk. The business produced a loss in the current year and Ferris's share of the loss is $45,000. Assuming Ferris has no passive income, how much of the $45,000 loss will be deductible by Ferris? Multiple Choice $0. $30,000. Cannot be determined. $45,000.
- Frank's Mini Mart sold a piece of equipment on an installment agreement, to a competitor on the other side of town. The other owner failed to make the payments and Frank had to repossess the equipment. What is Frank's gain or loss on repossessed personal property with a fair market value of $12,000 on the date of repossession, where the seller's basis in the installment obligation at the time of repossession is $7,500, and the costs of repossession were $500? (a) Loss of $500. (b) Gain of $4,000. (c) Gain of $4,500 (d) Gain of $5,000.On July 24 of the current year, Sam Smith was involved in an accident with his business use automobile. Sam had purchased the car for 30,000. The automobile had a fair market value of 20,000 before the accident and 8,000 immediately after the accident. Sam has taken 20,000 of depreciation on the car. The car is insured for the fair market value of any loss. Because of Sams history, he is afraid that if he submits a claim, his policy will be canceled. Therefore, he is considering not filing a claim. Sam believes that the tax loss deduction will help mitigate the loss of the insurance reimbursement. Sams current marginal tax rate is 35%. Write a letter to Sam that contains your advice with respect to the tax and cash flow consequences of filing versus not filing a claim for the insurance reimbursement for the damage to his car. Also prepare a memo for the tax files. Sams address is 450 Colonels Way, Warrensburg, MO 64093.Lisa sells business property with an adjusted basis of $168,800 to her son, Alfred, for its fair market value of $135,040. If an amount is zero, enter "0". a. What is Lisa's realized and recognized gain or loss? Lisa has a $ realized of which $ b. What is Alfred's recognized gain or loss if he subsequently sells the property for $185,680? For $109,720? If Alfred sells the property for $185,680, he has a recognized is recognized. If Alfred sells the property for $109,720, he has a recognized of $