Shenandoah Skies Bought Land to Be Used for a New

question 251

Multiple Choice

Shenandoah Skies bought land to be used for a new ski resort.Which of the following costs should not be capitalized?

• A)$5,000,000 to purchase the land.
• B)$5,000 paid to Jack Mogul for a title search.
• C)$50,000 paid to cut down timber to make way for ski runs
• D)$7,500 paid for a party to celebrate the grand opening.

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Definitions:

AGI

Adjusted Gross Income, which is gross income minus specific deductions, used to calculate an individual's tax liability.

EIC

The Earned Income Credit, a refundable tax credit for low- to moderate-income working individuals and families, particularly those with children.

Tax Liability

The total amount of tax that an individual or business is legally obligated to pay to a taxing authority.

Premium Tax Credit

A refundable credit that helps eligible individuals and families cover the premiums for their health insurance purchased through the Marketplace.