Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. liam hernandez (38) paid $112,000 for a single-fam

Liam Hernandez (38) paid $112,000 for a single-family home in Eugene, Oregon on July 1,...

50.1K

Verified Solution

Question

Accounting

Liam Hernandez (38) paid $112,000 for a single-family home in Eugene, Oregon on July 1, 2021 and immediately placed it in service as a residential rental property. At the time, the land was valued at $10,000. The property generated $6,000 in rental income for the year. Liam's only expenses consisted of depreciation, $500 in insurance, and $750 in real estate taxes.

To finance the purchase, Liam sold his townhouse in Corvallis, Oregon, which was his principal residence since March 2018, for $98,150.

Liam is not a real estate professional, but he does actively participate in his rental real estate activity. He did not provide any personal services during the year, although he has notified his tenant that he will make minor repairs to the property as needed. Liam has no other passive income or losses.

Question:

Which of the following statements is correct with respect to the sale of the Corvallis property?

a.Liam cannot exclude any gain from the sale from his income.

b.Liam is required to file Form OR-18-WC with his 2021 Oregon tax return.

c. Liam has no Form OR-18-WC or withholding requirements.

d. Liam must withhold 4% of the sales price and report it as an estimated tax payment on his 2021 tax return.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Finance
1.2K views

Canyon Tours showed the following components of working capital last year: Beginning End of Year Accounts...

Finance
1.2K views

Problem 16-14 Cash Budgeting Dorothy Koehl recently leased space in the Southside Mall and opened a new business,...

Biology
1.2K views

OOO Assertion A Johnson removed Secretary of War Edwin Stanton from office in 1868 Reason...

Algebra
1.2K views

K Let f x 3x 5 and g x 2x 7 Find f g x...

Algebra
1.2K views

restaurant waiting times min 20 35 15 25 5 10 40 30 10 50 20...

Accounting
1.2K views

3 of 4 bok 7 nt ces Required information [The following information applies to...

Accounting
1.2K views

To reduce the undesirable incentives to build up inventories management can institute planning, budgeting, and...

Accounting
1.2K views

Your Resource Manager provided you the FY23 Requirements (See FY24_25 Tab). After discussing with your...

Accounting
1.2K views

Menlo Company distributes a single product. The company's sales and expenses for last month follow:...

Accounting
1.2K views

E23-10 Lowell Company makes and sells artistic frames for pictures. The controller is responsible for...

Accounting
1.2K views

On January 2,2021, Athol Company bought a machine for use in operations. The machine has...

Accounting
1.2K views

M) The office supplies inventory account had a balance of $2,000 at the beginning of...