What are the tax consequences of choosing the lower down pay

Assignment Help Financial Accounting

Reference no: EM13145262

Your client Bob Young is negotiating a sale of investment real estate for $12 million. Bob believes that the buyer would pay cash of $8 million and a note for $4 million. Or $3 million cash and a note for $9 million. The note will pay interest slightly above the market rate. Bob realizes that the second option involves more risks of collection, but he is willing to accept that risk if the tax benefits of the installment sale are substantial. What are the tax consequences of choosing the lower down payment and larger note option, assuming he has no other installment receivables?

Reference no: EM13145262

Questions Cloud

Proportion of adult men in united states are more tthan feet : What proportion of the adult men in United States are more than feet tall? (Hint: feet inches.) Round your answer to at least four decimal places.

Sale and the first interest payment : Assume the bonds are sold at par, and that interest is paid semi-annually. Record below the sale and the first interest payment.

What is the outside temperature in k : A helium-filled balloon has a volume of 2.75 L at 17 C. The volume of the balloon decreases to 2.36 L after it is placed outside on a cold day. What is the outside temperature in K?

Economic domain of culture to be base or core of culture : The second key part of the anthropological perspective is holism, the idea that all the parts of a culture are integrated. However, anthropology considers the economic domain of culture to be the “base” or “core” of the culture.

What are the tax consequences of choosing the lower down pay : What are the tax consequences of choosing the lower down payment and larger note option, assuming he has no other installment receivables?

Efficient project management : Organizational support and openness to such research should help paving the way forward to a successful execution in terms of interviews and survey. Organization support concurrence to run scurvies, interviews and questionnaires.

Basocs of additional first-year depreciation : Audra elects section 179 for asset C. Audra's taxable income from her business would not create a limitation for purposes of the section 179 deduction. Audra elects not to take additional first-year depreciation. Determine her total cost recovery ..

What are three required conditions for contingent liability : what are the three required conditions for a contingent liability to exist? What is one contingency that an auditor would be concerned with and how would the auditor become aware of this contingency?

What were the human impacts due to the oil spill : Due to the world's reliance on oil, there have been many oil spills in recent history during the transport of oil from its point of origin to its destination.

User Account

All Pages