Brandon, an individual, began business four years ago and has sold $1231 assets with $5,200 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 Machinery Land Building Original Cost $30,400 44,000 98,000 Accumulated Depreciation $7,400 0 Gain/Loss O $23,200 ordinary income and $7.424 tax liability O $23,200 51231 gain and $3,480 tax liability O $10,600 51231 gain, $12,600 ordinary income, and $5,622 tax liability O $12,600 $1231 gain, $10,600 ordinary income, and $5,282 tax liability None of the choices are correct. $10,200 22.000 (9.000) 24,000 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 $5,200 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 Machinery Land Building Original Cost $30,400 44,000 98,000 Accumulated Depreciation $7,400 0 Gain/Loss O $23,200 ordinary income and $7.424 tax liability O $23,200 51231 gain and $3,480 tax liability O $10,600 51231 gain, $12,600 ordinary income, and $5,622 tax liability O $12,600 $1231 gain, $10,600 ordinary income, and $5,282 tax liability None of the choices are correct. $10,200 22.000 (9.000) 24,000 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Brandon, an individual, began business four years ago and has sold $1231 assets with $5,200 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 Cost
Asset
Machinery
Land
Building
$30,400
44,000
98,000
Accumulated Depreciation
$7,400
0
24,000
Gain/Loss
O $23,200 ordinary income and $7.424 tax liability
O $23,200 51231 gain and $3,480 tax liability
Ⓒ$10,600 $1231 gain, $12,600 ordinary income, and $5,622 tax liability
O $12,600 51231 gain, $10,600 ordinary income, and $5,282 tax liability
O None of the choices are correct.
$10,200
22,000
(9.000)
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.
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