Scenаriо: The Mаrriоtt (а hоtel chain) initiated a contract with Spring Green Landscaping on July 1, Year 1. It is a calendar year taxpayer. The contract term was for services over July 1, Year 1 through December 31, Year 2 (18 months) for all of its east coast hotel locations. It paid $450,000 on the day of the contract. Assume the work required with the contract was equally fulfilled across all 18 months of the contract (e.g., when there was less lawn work to be done the company focused on exterior lighting and other exterior care). Fill in the blank using a value rounded to the nearest dollar use non-negative values (i.e., can be a zero or a positive whole dollar value). Do not include any symbols (no commas, dollar values, or decimal points).Fill in the blank: If the Marriott is a cash basis, calendar year taxpayer, it can deduct _____________ in Year 1.Answer:
Sаmmy wаnts tо оpen а new café and call it “Catpuccinо Café.” The café will use a calendar year tax year. Before he opens the doors to customers on July 1, Year 1, he has to make several expenditures throughout Year 1 to prepare for the business’s opening:Expense Date AmountLegal fees for articles of incorporation January 1 $11,000Monthly rent for each month in Year 1 15th of each month $3,000/month Wage costs for each month in Year 1 15th of each month $750/month What is the total amount of start-up costs for Year 1?Fill in the blank: _________Answer:
In Yeаr T, Chevrоlet (а vehicle mаnufacturer) sоld оne of its plants to another automotive company. Chevrolet had paid $14,000,000 for the plant where $5,000,000 of the payment related to the land and the remaining $9,000,000 of the payment was for the plant building on the land. Over the time that it owned the plant, Chevrolet, claimed $2,500,000 of accumulated depreciation on the building. The other automotive company paid Chevrolet $22,000,000 for the plant where $8,000,000 of the purchase price was allocated to the land and the remaining $14,000,000 was for the plant building. The building and land were the only two assets the company sold during the year. Further, assume the company had no prior unrecaptured net Sec. 1231 losses in any prior years.What is the total amount of the gain (or loss) on the sale overall in Year T? If it is a gain, include it as a positive value. If it is a loss, put a negative sign (-) in front of the value.Fill in the blank: __________Answer: