state_taxes_solutions - of stock to Lee for $300,000 cash...

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Solution : Florida state & local taxes In 2010, Bob and Lee start Florida Orange, Inc. Assume the following Florida state and local taxes: Tax Rate Real and tangible personal property tax Sales tax 2.0% 6.0% Nonrecurring intangibles tax 0.2% Document stamp tax on real estate 0.7% Document stamp tax on other documents 0.35% Required : What is the amount of Florida state and local taxes that will result from the two following transactions? Indicate whether the tax applies to the shareholders – Bob and Lee, the corporation (Florida Orange, Inc.), or a third party (e.g., the seller of real estate). Multiple taxes apply to each transaction. Include current and annual taxes. Ignore income taxes a. They issue 10,000 shares of stock to Bob for $400,000 cash and 10,000 shares
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Unformatted text preview: of stock to Lee for $300,000 cash plus equipment worth $100,000 (and with an income tax adjusted basis of $30,000). • Annual tangible personal property tax (equipment) = $100,000 x .02 = $2,000 paid by corporation. • Sales tax on equipment = $100,000 x .06 = $6,000 paid by corporation. b. Florida Orange buys a building paying $100,000 down and taking out a $400,000 mortgage. • Title document stamp tax = $500,000 x .007 = $3,500 any party, but seller usually pays. • Annual real property tax = $500,000 x .02 = $10,000 paid by corporation. • Nonrecurring intangibles tax = $400,000 x .002 = $800 paid by corporation. • Mortgage document stamp tax = $400,000 x .0035 = $1,400 paid by corporation....
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This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

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