Assuming Back to the Futon will continue in business and be profitable in 2021, what should Back to the Futon do in order to optimize the amount of losses to be carried forward, post-AOC? None of the other options. O Recognize the net capital loss of $42,500 on the land at the end of 2020. Elect to dispose of the building at an elected value of $100,000, resulting in $25,000 of recapture. O Elect to recognize a net capital loss of $42,500 on the land at the end of 2020. Also, record $25,000 of recapture and a taxable capital gain of $50,000 on the building O Write the land down to its fair market value and recognize a net capital loss of $42,500 at the end of 2020. No elections are available on the building O Write the land down to its fair market value and recognize a net capital loss of $42.500 at the end of 2020. Elect to dispose and reacquire the building at an elected value of $185,000, resulting in $25,000 of recapture and a taxable capital gain of $42.500.

Assuming Back to the Futon will continue in business and be profitable in 2021, what should Back to the Futon do in order to optimize the amount of losses to be carried forward, post-AOC? None of the other options. O Recognize the net capital loss of $42,500 on the land at the end of 2020. Elect to dispose of the building at an elected value of $100,000, resulting in $25,000 of recapture. O Elect to recognize a net capital loss of $42,500 on the land at the end of 2020. Also, record $25,000 of recapture and a taxable capital gain of $50,000 on the building O Write the land down to its fair market value and recognize a net capital loss of $42,500 at the end of 2020. No elections are available on the building O Write the land down to its fair market value and recognize a net capital loss of $42.500 at the end of 2020. Elect to dispose and reacquire the building at an elected value of $185,000, resulting in $25,000 of recapture and a taxable capital gain of $42.500.

Name: Back to the Futon had an acquisition of control (AOC) on January 1, 2
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Description: Back to the Futon had an acquisition of control (AOC) on January 1, 2021. In the year prior to the AOC, the company had a non-capital loss of $65,000, which it could notcarry backOn December 31, 2020, the company had 2 assets:1. Land with an adjuste

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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