b1. Assume that the amount realized increased so that the building was sold at a $6,000 gain instead. What is the amount and character of Buckley's gains or losses for the current year? b2. Calculate Buckley's tax liability or tax savings for the year.
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- Wally, Inc., sold the following three personal property assets in year 6: What is Wallys Section 1245 recapture in year 6? a. 500 loss b. 300 gain c. 800 gain d. 1,600 gainBuckley, an individual, began business two years ago and has never sold a §1231 asset. Buckley has owned each of the assets since he began the business. In the current year, Buckley sold the following business assets: Original Accumulated Depreciation $ 2,000 4,000 12,000 10,000 Asset Cost Gain/Loss $ 6,000 10,000 20,000 100,000 $ (3,000) (2,000) 7,000 (1,000) Computers Machinery Furniture Building Assuming Buckley's marginal ordinary income tax rate is 32 percent, answer the questions for the following alternative scenarios: c1. Assume that the amount realized increased so that the building was sold at a $15,000 gain instead. What is the amount and character of Buckley's gains or losses for the current year? c2. Calculate Buckley's tax liability or tax savings for the year. Complete this question by entering your answers in the tabs below. Show less A Req c1 Req c2 Calculate Buckley's tax liability or tax savings for the year.Buckley, an individual, began business two years ago and has never sold a §1231 asset. Buckley has owned each of the assets since he began the business. In the current year, Buckley sold the following business assets: Original Accumulated Gain/Loss Depreciation $ 2,000 4,000 12,000 10,000 Asset Cost Computers Machinery Furniture $ 6,000 10,000 20,000 100,000 $ (3,000) (2,000) 7,000 (1,000) Building Assuming Buckley's marginal ordinary income tax rate is 32 percent, answer the questions for the following alternative scenarios: a1. What is the amount and character of Buckley's gains or losses for the current year? a2. Calculate Buckley's tax liability or tax savings for the year. Complete this question by entering your answers in the tabs below. Req al Req a2 Calculate Buckley's tax liability or tax savings for the year.
- Brandon, an individual, began business four years ago and has sold §1231 assets with $5,550 of losses within the last five years. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets: Asset Original Cost Accumulated Depreciation Gain/Loss Machinery $ 31,100 $ 8,100 $ 10,550 Land 51,000 0 25,500 Building 112,000 31,000 (16,000 ) Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability? Use dividends and capital gains tax rates for reference.Brandon, an individual, began business four years ago and has sold §1231 assets with $6,000 of losses within the last five years. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets: Original Accumulated Cost Depreciation Gain/Loss $ 10,000 20,000 (5,000) Asset Machinery $ 30,000 $ 7,000 Land 40,000 0 Building 90,000 20,000 Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability? Which of the following is true regarding the $1231 look-back rule? Which one of the following is not a requirement of a deferred like-kind exchange? Which of the following is not an involuntary conversion?11. Subject :- Accounting Sumner sold equipment that it uses in its business for $30,800. Sumner bought the equipment a few years ago for $79,600 and has claimed $39,800 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss? Multiple Choice $9,000 §1231 loss. $9,000 §1245 loss. $48,800 ordinary loss. $9,000 capital loss. None of the choices are correct.
- Emily, an individual, began business four years ago and has never sold a Section 1231 asset. Emily owned each of the assets for several years. In the current year, Emily sold the following business assets. Accumulated Asset Original Cost Gain/Loss Depreciation Machinery $32,000 $7,300 $10,500 Computers Building $12,000 $5,000 $(2,400) $120,000 $24,000 $(3,000) Assume Emily's marginal ordinary income tax rate is 32%. a. Determine the character of each gain and loss. b. Complete the Section 1231 netting process and determine net section 1231 gain or loss and its final character. c. Determine Emily's tax liability or tax savings for the year.The Yeet Corporation purchased an office building several years for $200,000. The company took straight-line MACRS deductions of $30,000 during the time-period it held the property. In the current year, Yeet sells the property for 225,000. What is the amount and character of Yeet's recognized gain or loss on the sale? a. $6,000 ordinary, $49,000 Section 1231. b. $30,000 ordinary, $25,000 Section 1231. c. $55,000 ordinary. d. $6,000 Section 1231, $49,000 ordinary. e. $55,000 Section 1231.Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $72.500. and it has claimed $24,800 of depreciation expense against the building. Required: a. Assuming that Houswirth receives $59,700 in cash for the warehouse, compute the amount and character of Hauswirth's recognized gain or loss on the sale. b. Assuming that Hauswirth exchanges the warehouse in a like-kind exchange for some land with a fair market value of $59,700 compute Houswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. c. Assuming that Houswirth receives $26.500 in cash in year 0 and a $57,000 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain or loss in year 0 and in year 1. Complete this question by entering your answers in the tabs below. Required a Required b Required c Assuming that Hauswirth receives $59,700 in cash for the warehouse, compute the amount…
- Ms. Drake sold a business that she had operated as a sole proprietorship for 18 years. On the date of sale, the business balance sheet showed the following assets: Accounts receivable Inventory Furniture and equipment: Cost Accumulated depreciation Leasehold improvements: Cost Accumulated amortization Tax Basis $ 44,000 185,600 Net cash flow 63,200 (50,560) 21,000 (4,200) Required: The purchaser paid a lump-sum price of $349,000 cash for the business. The sales contract stipulates that the FMV of the business inventory is $190,800, and the FMV of the remaining balance sheet assets equals adjusted tax basis. Assuming that Ms. Drake's marginal tax rate on ordinary income is 35 percent and her rate on capital gain is 15 percent, compute the net cash flow from the sale of her business.Hauswirth Corporation sold (or exchanged) a warehouse in year 0. Hauswirth bought the warehouse several years ago for $102,000, and it has claimed $ 33,800 of depreciation expense against the building. Required Assuming that Hauswirth receives $80, 500 in cash for the warehouse, compute the amount and character of Hauswirth's recognized gain or loss on the sale. Assuming that Hauswirth exchanges the warehouse in a like kind exchange for some land with a fair market value of $80, 500, compute Hauswirth's realized gain or loss, recognized gain or loss, deferred gain or loss, and basis in the new land. Assuming that Hauswirth receives $27,500 in cash in year 0 and a S 88,500 note receivable that is payable in year 1, compute the amount and character of Hauswirth's gain or loss in year 0 and in year 1.In year 0, Longworth Partnership purchased a machine for $57,250 to use in its business. In year 3, Longworth sold the machine for $44,300. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $24,900. Note: Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable. a. What are the amount and character of the gain or loss Longworth will recognize on the sale? Description Total Gain or (Loss) Recognized Character of Recognized Gain or (Loss): Ordinary Gain or (Loss) $1231 gain or (loss) Amount