...and Mrs. Jamison; In answer to the question that concerns you about the conversion of the vacation home into a rental property I have some recommendations for you. I am going to give some options for your consideration. Your vacation home could be converted into a rental property and you could get $4,500 tax-free. If you charge $150 per night to rent it, the vacation home would have to be used at least 30 days per year to generate the income necessary. However, you can rent the vacation home for 15 days per year this will make the income tax-free. If you use the property for15 days and rent it for 15 days you would receive a yield that would be beneficiary for you. You vacation home will appreciate over time, and that capital gain from the sale (if you ever decide to sell it) would be probably tax-favored, maximum rate of 15% if the property was not depreciated. Another good outcome is to rent the property until you are ready to retire. Make sure that you can rent your property with good tenants. Maybe you do not want to manage the property; some companies can manage it for you for a fee. When you are ready to retire you can sell the rental property and use the 250.000/500.000 of gain tax free to enjoy a better and relaxed retirement. You can always convert the rental property into residential without paying taxes on the property. You can make a “tax free exchange” of the rental before converting it into a residential property. This way you can go back to what you have...
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...Subject: Tax Issues of Lee’s Decision on Purchasing a Vacation Condo Facts: Mr. and Mrs. Lee are considering investing in a $500,000 condominium in Miami Beach, Florida, as their vacation home. Their marginal tax bracket is 33% and they also pay Maryland state and country income taxes at a rate of 7%. They are required to put down a 20% deposit and will get a mortgage for the balance for ten years’ interest at 5% annually. They can rent the condominium back to the Developer for two years for $4,000 a month and still use the unit for up to 30 days a year. Besides, indirect expenses are estimated including property taxes at $10,000 a year, a maintenance fee at $6,000 a year, insurance at $200 a month and utilities at $300 a month. The salesman expected the property would enjoy a 6% appreciation rate each year. Issue A: Can this condominium provide the Lees with desirable personal use characteristics and provide attractive tax write-offs? Authorities: §212, §280A (d), §280A (e), §280A (f) Conclusion: The condo can provide Lees with a beautiful fixed vacation destination for up to 30 days a year with attractive tax write-offs of all expenses allocated to the rental use days of the condo as for AGI deduction under nonresidence purpose. Analysis: The nontax benefits of purchasing the vacation condo include a fixed vacation destination and the opportunity of generating rental income. Correspondingly, in § 212, there shall be allowed as a deduction all the ordinary and necessary...
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...Agnes occupied the beach house for 38 days and rented it for 49 days. The log also indicated that of the 38 days they occupied the house, 24 days were used to repair the property. During those 24 days, one or both of them were working on the house with two teenage children present. The children did not help with the construction. Rex and Agnes filed a joint return and treated the beach house as a rental property. In determining their net loss from the beach home, they deducted a pro rata share of the property taxes, mortgage interest, utilities, maintenance and repairs, and depreciation. An IRS agent, after examining Harrells return in the current year, limited the deductions to the rent income. Proposed Solution: Rex and Agnes can treat the beach house as rental property and are eligible to deduct the items they deducted on their income tax return. If the residence is rented for 15 days or more in a year and is not used for personal purposes for more than the greater of (1) 14 days or (2) 10 percent of the total days rented, the residence is treated as rental property. The...
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...industry .However, over the years, competition in the industry increased and many established brands e.g. hotel sector, started to enter the market. Facing these changes and the customers’ demands for more exotic destinations abroad, resulted in the need to expand internationally. The case reflects the company’s recent development and discusses several options and strategic alternatives. This paper will analyze Exclusive Resorts situation in terms of industry, environment, and as well as internal factors. We will present a number of possible strategic alternatives with its advantages and disadvantages. Finally we will conclude the analysis with our recommendations. II. INDUSTRY AND ENVIRONMENT ANALYSIS Over the last few decades the luxury vacation industry has been characterized by the increased demand for the perfect vacation and increases in income in top percentages of the American population. Around the time of the early 2000's only 3 to 5 million Americans could afford the type of membership fee required to join a business similar to Exclusive resorts. The residence club industry is high fragmented and made up of timeshares, private resident clubs, whole ownership second homes, luxury villa rental, branded private residence clubs and destination clubs. The only one of the above mentioned that competes directly with Exclusive Resorts are destination clubs. Exclusive Resorts follows a differentiation strategy distinguishing themselves from the others by product offerings,...
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...this should be included in their gross income despite what they were previously told. Based on code sections 109 and 280A, the rent must be included in gross income and is not allowed to be a deduction because of rental use. Even though the producers were only occupying the property for less than 15 days, the amount of money the Rattameyers received as a rental payment can potentially be seen as a bit much considering the value of their home and the duration of time the property was being occupied. Furthermore, the legal doctrine of substance over form can come into play. The economic value of this transaction far outweighs any potential tax break given. In addition, the value of the Disneyland vacation should be included in gross income. Although, my decision is not based on substantial authority, I strongly believe this is the right thing to do. The Rattameyers and the producers of Surprise Home Makeover entered into a contractual agreement, which listed this vacation as a part of their compensation for being able to use the Rattameyers’ residence. If this vacation was considered compensation, then it should be treated as such on the tax return. It is not an everyday occurrence that people are given multi-thousand dollar vacations in exchange for the use of their home. Lastly, the value of the improvements/renovations that were made to the Rattameyers’ residence should not be included in gross income. According to code section 109, gross income does not include income...
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...Internal Revenue Code (IRC), like-kind exchange can defer gain and loss from the transaction. Therefore, it may save some tax cost. However, those IRC defined this nontaxable like-kind exchange in an extremely narrow range. Conflicts of the recognition of like-kind properties often happen between taxpayer and the Tax Count. Therefore, it may hard for owner A to take this tax advantage of like-kind exchange. This paper will focus on qualification issue of like-kind exchange. It will firstly briefly show the relevant Federal Income Tax code of like-kind exchange and highlight two controversial parts when those codes applying. Additionally, several relevant cases will be analyzed to show how like-kind exchange property is qualified in real world. Those cases also give Owner A some suggestions of house exchange. Finally, based on cases analyze above, a possible exchange plan of Owner A will be explained. General Rule of Like-kind Exchange IRS Code In general, according to§1031(a), no gain of loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment. Besides, property should be identified and this exchange should be completed within 180 days after transfer of exchanged property. In addition, exchange would include not only the like-kind property but also some other property...
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...For the exclusive use of B. Varghese, 2015. 9-511-004 REV: APRIL 14, 2011 SUNIL GUPTA KERRY HERMAN Tri ipAdvisor It w early Mo was onday mornin in the first week of Au ng t ugust 2010, an just back i his office fr nd in rom a two-w week family vacation, Step v phen Kaufer, founder and CEO of Trip d pAdvisor (TA was happy and A), y relaxe Kaufer ha rented two houses for his family’s vacation in M ed. ad o Martha’s Vin neyard—one h house from TA’s newest service, Vaca ation Rentals, and the other from a competitor site. K Kaufer was pl leased that th house he found throug TA’s listing was far sup he f gh g perior to the o off his competitor’s sit He one te. was v very optimisti about the fu ic uture potentia of TA’s ent into this se al try egment. As Kaufer settl in his off s led fice, he saw a note from Bryan Saltzb burg, General Manager of New l Initiat tives and head of TA’s f flight service requesting an urgent m e, meeting. In F February 2009 TA 9, hed launch a flight metasearch se m ervice similar to Kayak, w r where consum mers could com mpare prices from s severa airlines and online trave agencies (O al d el OTAs). The hi ighly competi itive online flight search m market becam even more competitive in July 2010 when Goog announce that it was acquiring ITA, a me e e 0 gle ed s leadin flight-info ng ormation soft tware compa any, for $700 million.1 Ka 0 aufer was su that Saltz ...
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...In the case, the married couple Ted and Ruth are planning to sell their principal residence in Richmond and purchase a new one after that. Meanwhile, they and their families use their vacation home in Maryland on a frequent basis. The main tax issues we need to examine here are (1) How much gain should Ted and Ruth realize and recognize on sale of their principle residence? What is the nature of such gain? Should they include the gain in their gross income? (2) Are Ted and Ruth allowed to deduct expenses for their vacation home on the joint tax return? According to Internal Revenue Code section 121 (a) & (b), individuals can exclude up to $250,000 gain from gross income on sale of a main home (or $500,000 for joint returns) as long as they have owned the home and used the home for a minimum of two years. The two years are aggregating which means your living period in the house does not need to be consecutive. However, the $500,000 limitation does not apply to the married couple in our case since Ted fails the use requirements mentioned above (section 121 (b) (2) (A) (ii)). Since Ted moved into the Richmond home on December 13 of 2010 and that the sale date is September 1 of 2012, his stay in the house is less than two years. The amount they can exclude should be the sum of each spouse’s limitation amount determined on a separate basis as if they had not been married (section 121 (b) (2) (B)). Since Ted would not have owned the house if he had not married to Ruth, the amount of...
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...PROBLEMS 33. Since these expenses relate to Sandra’s law practice, all are deductible in calculating her AGI. Therefore, they reduce AGI by $4,225. Conference registration ($800 + $800) $1,600 Airline tickets ($900 + $400) 1,300 Lodging ($650 + $350) 1,000 Rental car in San Francisco 325 $4,225 pp. 6-2 and 6-3 34. a. Carlton’s AGI is calculated as follows: Gross income: Salary income $72,000 Dividend income 4,000 Interest income 3,000 $79,000 Deductions for AGI: Alimony paid $12,000 Traditional IRA contribution 3,000 Loss on sale of stock 900 (15,900) Adjusted gross income $63,100 b. Itemized deductions: Contributions to First Church $ 2,500 Real estate taxes on personal residence 1,800 Mortgage interest on personal residence 6,000 State income taxes 3,500 Total itemized deductions $13,800 Since the standard deduction for 2005 of $4,850 is less than Carlton’s itemized deductions of $13,800, he should itemize deductions in 2005. pp. 6-3 to 6-5 35. With IRA Contribution Without IRA Contribution Gross income $10,200 $10,200 Contribution to IRA (3,000) (-0-) AGI $ 7,200 $10,200 Itemized deductions: Charitable contribution $ 2,000 $ 2,000 Medical expenses [$2,200 – (7.5% X AGI)] 1,660 1,435 Casualty loss [($3,500 – $100) – (10% X AGI)] 2,680 2,380 Total itemized deductions $ 6,340 $ 5,815 ...
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...Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to COMMISSION FILE NO. 001-32876 WYNDHAM WORLDWIDE CORPORATION (Exact name of registrant as specified in its charter) 20-0052541 (I.R.S. Employer DELAWARE (State or other jurisdiction of incorporation or organization) Identification No.) 22 SYLVAN WAY 07054 PARSIPPANY, NEW JERSEY (Zip Code) (Address of principal executive offices) (973) 753-6000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each Class on which registered Common Stock, Par Value $0.01 per share New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None (Title of Class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. No ¨ No Yes ¨ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by...
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...ACCT 5318 Tax Research – Case 5 Fall 2007 Last year, the Rattameyers, of Oakland, California, were featured on Surprise Home Makeover, a network television show in which families are chosen to receive a “home makeover” by a team of designers, paid for by the producers of the show. The show sent the family to the DisneyWorld Resort in Orlando, Florida for one week, while its team of designers, carpenters, and other construction professionals ripped out substantial portions of their home and made extravagant renovations for its television audience. The Rattameyers entered into a contract with the producers of Surprise Home Makeover in which they rented their home to the producers for one week, in return for $50,000 rent, and an all-expenses paid trip to Disney World for the entire family. The estimated value of the Disney World vacation was $15,000. While the family was away, Surprise Home Makeover’s team of designers essentially gutted the interior of their home, and rebuilt it. They replaced the flooring, wall treatments, all the major appliances, and most of the furniture. They installed a new giant screen plasma television in a new room added onto the house, built a redwood deck in the backyard complete with wetbar, grill and sink, and installed grass, trees, shrubbery and wrought-iron fencing. All considered, the show spent approximately $250,000 renovating and remodeling the Rattameyers’ home. The Rattameyers loved the new home, but even if they had been disappointed...
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...ACCT 5318 Tax Research – Case 5 Fall 2007 Last year, the Rattameyers, of Oakland, California, were featured on Surprise Home Makeover, a network television show in which families are chosen to receive a “home makeover” by a team of designers, paid for by the producers of the show. The show sent the family to the DisneyWorld Resort in Orlando, Florida for one week, while its team of designers, carpenters, and other construction professionals ripped out substantial portions of their home and made extravagant renovations for its television audience. The Rattameyers entered into a contract with the producers of Surprise Home Makeover in which they rented their home to the producers for one week, in return for $50,000 rent, and an all-expenses paid trip to Disney World for the entire family. The estimated value of the Disney World vacation was $15,000. While the family was away, Surprise Home Makeover’s team of designers essentially gutted the interior of their home, and rebuilt it. They replaced the flooring, wall treatments, all the major appliances, and most of the furniture. They installed a new giant screen plasma television in a new room added onto the house, built a redwood deck in the backyard complete with wetbar, grill and sink, and installed grass, trees, shrubbery and wrought-iron fencing. All considered, the show spent approximately $250,000 renovating and remodeling the Rattameyers’ home. The Rattameyers loved the new home, but even if they had been disappointed...
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...The Netflix case covers the period since the inception of Netflix (1997) until sometime in 2007. I will admit, it is difficult to put myself in the shoes of “2007 Jonathan”, while not allowing my knowledge of Netflix’s future stunning success and Blockbuster’s ultimate bankruptcy to influence my decision making process. Let’s try anyways. By 2007, Blockbuster had made it abundantly clear, whether via actions or words, about their perceived vision of the future of the video rental industry. In 2002 they claimed that there was no “financially viable long-term” online rental business. They also claimed there was “not enough demand” for a mail order business model as well. Finally in 2004, they started to take things seriously with the introduction of Blockbuster Online. That was essentially the beginning of the end for Blockbuster, with many analysts noting in hindsight that it was too little too late. During the early 2000s, Netflix was driving forward by using the power of the internet (the usage of which is a great example of disruptive innovation), innovating an entirely new industry right under the nose of Blockbuster. While they started out as a “mail order” video rental company, they ultimately thrived due to the use of innovative algorithms, a website, a search engine, and a novel pricing structure; one that Blockbuster couldn’t even imagine working. During this this time, Blockbuster’s absorptive capacity was so low that they were unable to harness the power of the...
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...and Breakfast Daris Davis Dr. Mensah-Dartey Business Enterprise June 6, 2010 Business Description Bed and Breakfast is an exciting new down home kind of business springing up all across the country. In 1975, there were only 400 bed and breakfast inns in the United States. That number is over 15,000 today. The professional association of Innkeepers International foresees a doubling of bed and breakfast inns in the next century (Stankus, 1997). To ensure many return customers, we are looking to create a home away from home which may be more beautiful than where they are coming from. The blissfulness of down town Albany has always drawn a significant number of tourists to the area. Tourists will want to explore the riches of Albany like; the Albany Symphony Orchestra, Chehaw Wild Animal Park, Putt-Putt Golf & Games, Albany Museum of Art, and Ambiance Day Spa and Salon to name a few. In addition to providing information about such locations, we plan to collaborate with tour agencies and businesses throughout the area by offering packages and special rates with in-kind incentives for the cooperating merchants, including tours originating from Glamorz. Guest will be welcomed at the front door by the Innkeepers, pampered with comfortable accommodations, enjoy luxurious amenities and local attractions during their vacation. Each suite will be equipped with a gas fireplace, private bathroom, European towel warmer, hair dryer, magnifying mirror, a Jacuzzi whirlpool for...
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...Homework #3: Airbnb Case Study 1. What is Airbnb’s current value proposition? Airbnb is a consumer-to-consumer platform that helps people find accommodation for short term rentals. Airbnb’s current value proposition is that it can offer hosts a chance to earn money from their house or spare room; for the renters, they can feel more comfortable and more at home with paying less money than most hotels. Airbnb focuses on personalizing the guest experience and creating a great value proposition for traveler and host. It describes its measures of success to be social and economic. Figure 1 shows the cost between hotels and Airbnb. Airbnb apartments that are similar to hotel rooms show considerable savings in most major markets, which is 21% cheaper than a hotel. Figure 1 http://priceonomics.com/hotels/ 2. What is Airbnb’s biggest current opportunity? Airbnb’s biggest current opportunity is the potential market that Airbnb has not impacted on. To seek the potential market, Airbnb can develop new market and grow market share. For example, Africa is a good place for the expansion of Airbnb. Africa--like Cuba, where Airbnb is also growing fast--presents the company with a singular opportunity: There are too few budget and mid-priced hotels. [2] Data from two providers, Statista and STR Global, both show that the Middle East and Africa region have the highest average daily rate for a hotel room. Therefore, Airbnb’s cheap price can attract more people to use it. Figure...
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