Ch4 Homework

# Ch4 Homework - Yichen Zhang Student ID 12018413 42 The...

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Yichen Zhang Student ID: 12018413 42. The partnership deducted \$1,800 in premiuns paid for group term life insurance. And these premiums of \$10,000 have been deducted in calculating the partnership profit of \$210,000. Each partner has a one-third interest in the capital and profit of the partnership. So each partner’s gross income from the partnership for the tax year is \$70,600 [(\$210,000+1,800)/3] 46. a. Option1: D = \$80,000-(\$65,000+\$15,000) = \$ 0 E = \$95,000-[(\$80,000—\$0+\$65,000)/2+\$15,000]= \$7,500 R=\$0+\$7,500=\$7,500 b. Option2: D = \$95,000-(\$65,000+\$15,000)= \$15,000 E= \$80,000-[(\$95,000—\$15,000+\$65,000)/2+\$15,000]= -\$7,500 But E must be \$0 R= \$0+\$15,000= \$15,000 Option1i Option2, Option1 will result in the least alimony recapture in year3 48. a. Option1 : Cash in the CDs and lend Roy the funds at 6% interest \$9,000×(1-35%)—\$9,000×(1-15%)= -\$1,800 That’ll reduce the family’s negative cash flow: -\$3,075+\$1,800= -\$1,275 b.Option2: Guarantee the loan for Roy As Roy’s father will gurarantee the debt, the interest on the loan is \$10,500

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Ch4 Homework - Yichen Zhang Student ID 12018413 42 The...

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