7)Due to the population change, the Goose Creek School District has decided to close one of its high schools. Since it has no further need of the property, the school is listed for sale. The two bids it receives are as follows:
united Methodist Church $1,700,000
Planet GMC Motors$1,600,000
The United Methodist Church would use the property to establish a sectarian middle school. Planet, a well-known car dealership, would revamp the property and operate it as a branch location.
If you were a member of the school district board, what factors would you consider in evaluating the two bids?
8)Chris spends $800,000 to build a qualified low-income housing project, which is placed in service on January 1, 2012. He financed the project using his personal funds. What is the amount of the low-income housing credit that Chris may claim in 2012 (assuming a rate of 7.96%)? What is the total amount of the credit that Chris may claim as a result of the $800,000 expenditure?
9)Margaret is trying to decide whether or not to place funds in a qualified tuition program. Her son will be attending college in 4 years. She is in the 35% marginal tax bracket and she believes she can earn 7% before tax return on alternative investments. Thus $10,000 will accumulate to $11,948 (after-tax) in 4 years. Margaret expects tuition to increase at the rate of 5% each year to $12,155 in 4 years. Her son will be in the 15% marginal tax bracket in all relevant years. Given these assumptions, should Margaret participate in the qualified tuition program?
11)Shaquille operates a drug-running operation and incurred the following expenses:
Illegal kickbacks $32,000
Bribes to border guards $24,000
Cost of goods sold $300,000