STUVIA 2024/2025
$15,000 long-term capital gain.
h Ashley's holding period and her basis are carried over to Richard. $25,000 - $10,000 = $15,000
LTCG. - ✔✔On June 2, Ashley purchased 100 shares of stock for $10,000. When it was worth
$20,000, on December 25 of the same year, she gifted all the stock to her nephew, Richard. Richard
sold the stock on the following October 15th, for its fair market value of $25,000. What is Richard's tax
consequence?
$150 short term capital gain.
(200 - 50 = 150) The gain is a short term capital gain because Randy held the stock for exactly one
year. The holding period rule for long term capital gain treatment is that the taxpayer must hold the
asset longer than one year. - ✔✔Randy has ten shares of stock that he bought on March 1, Year 1,
for $5 each ($50 total). On March 1, Year 2, he sells all ten shares for $200. What is the income tax
consequence of the sale?
$18,810.
[(18,000 x 0.005) x 9 + 18,000] Christian did not fail to file - he failed to pay. Therefore, he owes the
0.5% per month or part of a month failure to pay penalty plus the outstanding tax amount of $18,000.
%
- ✔✔Christian filed his individual federal tax return for the year ending December 31, 2018 on April
15, 2019 and he owed $18,000. As of December 15, 2019, he still has not paid any his tax liability.
How much does Christian owe as of December 15, 2019?
$4,045,303.
Step 1
PV=$100,000 (1.20 x $100,000) - $20,000
N=20
I=3%
PMT=$0
FV=$180,611.12
Step 2
FV=0
N=35
I=2.9126% [(1.06 ÷ 1.03)-1] x 100
PMTAD=$180,611.12
PV=$4,045,303.36 - ✔✔Elin wants to retire in 20 years when she turns 60. Elin wants to have
enough money to replace 120% of her current income less what she expects to receive from Social
Security. She expects to receive $20,000 per year from Social Security in today's dollars. Elin is
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, STUVIA 2024/2025
conservative and wants to assume a 6% annual investment rate of return and assumes that inflation
will be 3% per year. Based on her family history, Elin expects that she will live to be 95 years old. If
Elin currently earns $100,000 per year and expects her raises to equal the inflation rate,
approximately how much does she need at retirement to fulfill her retirement goals?$
1 only
In a QTP, the owner / contributor alone controls the account. - ✔✔Which of the following statements,
if any, is (are) correct?
1. Prepaid Tuition plans provide for the prepayment of college tuition at current tuition prices with a
premium for future enrollment.
2. A disadvantage of a QTP (qualified tuition plan) is that the owner / contributor must relinquish
control of the account, and share control of the funds with the student / beneficiary.
1, 2 and 3.
Some accountants, investment advisors, financial planners, and others are qualified to give estate
planning advice. - ✔✔Which of the following advisors is/are qualified to give estate planning
advice?1. Attorneys.2. CPAs.3. Financial planners.
%
1,2, 3 - ✔✔Estate planning is an important aspect for which of the following?1. Probate and
succession.2. Financial planning.3. Retirement planning.
1,2,3,4 - ✔✔Which of the following statements correctly finish the following sentence. A minority
non-employee shareholder in an S corporation:
Receives compensation when the corporation declares a dividend.
Votes for the Board of Directors at the annual shareholders' meeting.
Receives a K-1 annually in order to prepare a personal income tax return.
Reports on a personal income tax return a prorata share of corporate profits or losses.
1,217,311.57
($80,000 X 0.80) = $64,000 - Steven's total needs, in today's dollars (26,000) - Less Steven's SS, in
today's dollars
$38,000 - Annual amount needed, in today's dollars
N =25 (68 - 43)
i = 3% (inflation)
PV = $38,000 (retirement needs, in today's dollars) PMT = 0
Solve for FV = 79,563.56133(first year's need for retirement) BEGIN
N = 22 (90 - 68)
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$15,000 long-term capital gain.
h Ashley's holding period and her basis are carried over to Richard. $25,000 - $10,000 = $15,000
LTCG. - ✔✔On June 2, Ashley purchased 100 shares of stock for $10,000. When it was worth
$20,000, on December 25 of the same year, she gifted all the stock to her nephew, Richard. Richard
sold the stock on the following October 15th, for its fair market value of $25,000. What is Richard's tax
consequence?
$150 short term capital gain.
(200 - 50 = 150) The gain is a short term capital gain because Randy held the stock for exactly one
year. The holding period rule for long term capital gain treatment is that the taxpayer must hold the
asset longer than one year. - ✔✔Randy has ten shares of stock that he bought on March 1, Year 1,
for $5 each ($50 total). On March 1, Year 2, he sells all ten shares for $200. What is the income tax
consequence of the sale?
$18,810.
[(18,000 x 0.005) x 9 + 18,000] Christian did not fail to file - he failed to pay. Therefore, he owes the
0.5% per month or part of a month failure to pay penalty plus the outstanding tax amount of $18,000.
%
- ✔✔Christian filed his individual federal tax return for the year ending December 31, 2018 on April
15, 2019 and he owed $18,000. As of December 15, 2019, he still has not paid any his tax liability.
How much does Christian owe as of December 15, 2019?
$4,045,303.
Step 1
PV=$100,000 (1.20 x $100,000) - $20,000
N=20
I=3%
PMT=$0
FV=$180,611.12
Step 2
FV=0
N=35
I=2.9126% [(1.06 ÷ 1.03)-1] x 100
PMTAD=$180,611.12
PV=$4,045,303.36 - ✔✔Elin wants to retire in 20 years when she turns 60. Elin wants to have
enough money to replace 120% of her current income less what she expects to receive from Social
Security. She expects to receive $20,000 per year from Social Security in today's dollars. Elin is
stuvia
, STUVIA 2024/2025
conservative and wants to assume a 6% annual investment rate of return and assumes that inflation
will be 3% per year. Based on her family history, Elin expects that she will live to be 95 years old. If
Elin currently earns $100,000 per year and expects her raises to equal the inflation rate,
approximately how much does she need at retirement to fulfill her retirement goals?$
1 only
In a QTP, the owner / contributor alone controls the account. - ✔✔Which of the following statements,
if any, is (are) correct?
1. Prepaid Tuition plans provide for the prepayment of college tuition at current tuition prices with a
premium for future enrollment.
2. A disadvantage of a QTP (qualified tuition plan) is that the owner / contributor must relinquish
control of the account, and share control of the funds with the student / beneficiary.
1, 2 and 3.
Some accountants, investment advisors, financial planners, and others are qualified to give estate
planning advice. - ✔✔Which of the following advisors is/are qualified to give estate planning
advice?1. Attorneys.2. CPAs.3. Financial planners.
%
1,2, 3 - ✔✔Estate planning is an important aspect for which of the following?1. Probate and
succession.2. Financial planning.3. Retirement planning.
1,2,3,4 - ✔✔Which of the following statements correctly finish the following sentence. A minority
non-employee shareholder in an S corporation:
Receives compensation when the corporation declares a dividend.
Votes for the Board of Directors at the annual shareholders' meeting.
Receives a K-1 annually in order to prepare a personal income tax return.
Reports on a personal income tax return a prorata share of corporate profits or losses.
1,217,311.57
($80,000 X 0.80) = $64,000 - Steven's total needs, in today's dollars (26,000) - Less Steven's SS, in
today's dollars
$38,000 - Annual amount needed, in today's dollars
N =25 (68 - 43)
i = 3% (inflation)
PV = $38,000 (retirement needs, in today's dollars) PMT = 0
Solve for FV = 79,563.56133(first year's need for retirement) BEGIN
N = 22 (90 - 68)
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