Impact of tax on price of land

Related BrainMass Solutions

• Suppose that the current market rate of interest is 10 perce

  451872 Suppose that the current market rate of interest is 10 percent. The market rent on a parcel of land is $6,000 per year. A 10-percent land tax is imposed. As a result of the tax, the price of the land parcel: falls from $60,000 to $30,000.

• Public Finance

  Suppose you purchase the parcel of land. After your purchase, a 5 percent property tax on the land is imposed. Calculate the impact of the tax on the market value of the land parcel. Can you avoid the tax by selling the land?

• Accounting Investment Projections

  Answer: Estimate of the impact changes in price on the profitability of the project can be found from the sensitivity of NPV with respect to price -- calculated by finding the NPV at any two different price levels and forming the ratio of the changes

• Cost of land versus building: Stakeholder interest, ethics

  433780 Cost of land versus building: Stakeholder interest, ethical recommendation Consider the Concepts for Analysis problem CA10-7 on cost of land versus building (ethics) dealing with the Tones Company.

• Tax issues for sale of land owned by a company

  Does the type of entity through which the business operates have a significant impact on the tax consequences resulting from a disposition of the land?

• Land Valuation for Capital Budgeting Analysis

  Thanks In consideration of the factory project, the land should be valued with a sales price of $375,000 Since the land could have been sold for $375,000 after-tax, their capital expenditure is the outlay of cash for thier project, which was expected

• Who should report a land gain: the trust or the beneficiary?

  ·What would be the impact on the trust and the beneficiary if an election is made to recognize gain on the land? ·What is the impact on the trust and the beneficiary if the election is not made? ·What you do recommend? 1.

• Opportunity cost of investment

  apply if the plot of land is sold) Therefore net Cash flow= $ 500,000 (on sale of plot of land) - $ 120,000 (Tax) = $ 380,000 Thus opportunity cost = $ 380,000 (The $100,000 paid as purchase price 20 years back is a sunk cost and therefore irrelevant

• Straight line depreciation

  Nagy Company negotiates a lump-sum purchase of several assets from a contractor who is relocating. The purchase is completed on January1, 2008, at a total cash price of $1,800,000 for a building, land, land improvements, and five trucks.