Brandon, an individual, began business four years ago and has sold $1231 assets with $5.400 of losses within the last 5 years. Brandon owned each of the assetsfor several years. In the current year, Brandon sold the following business assets:OriginalAccumulatedDepreciation$ 7,800AssetCostGain/LossMachinery$ 30,800$10,400Land48,00024,000Building106,00028,000(13, ее0)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.Multiple Choice$21,400 ordinary income, $6,848 tax liability.$21,400 $1231 gain and $3,210 tax liability.$8,200 51231 gain, $13,200 ordinary income, and $5,454 tax liability.$13,200 61231 gain, $8,200 ordinary income, and $4.604 tax liability

In this question, we have to calculate the ordinary gain tax liability and 1231 gain

Answered: Brandon, an individual, b for several…

Business

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Brandon, an individual, b for several years. In the c

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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Question

100%

Brandon, an individual, began business four years ago and has sold $1231 assets with $5.400 of losses within the last 5 years. Brandon owned each of the assets
for several years. In the current year, Brandon sold the following business assets:
Original
Accumulated
Depreciation
$ 7,800
Asset
Cost
Gain/Loss
Machinery
$ 30,800
$10,400
Land
48,000
24,000
Building
106,000
28,000
(13, ее0)
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.
Multiple Choice
$21,400 ordinary income, $6,848 tax liability.
$21,400 $1231 gain and $3,210 tax liability.
$8,200 51231 gain, $13,200 ordinary income, and $5,454 tax liability.
$13,200 61231 gain, $8,200 ordinary income, and $4.604 tax liability

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