Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $52,200 each. Dexter's basis in each lot sold is $36,540, and he incurs total selling expenses of $2,088 on each sale. What is the amount of Dexter's capital gain and ordinary income? If required, round your answers to the nearest dollar. Dexter has a realized and recognized gain of $ 488,000 x , of which $ 7,200 x is classified as ordinary income and 47,200 x as a capital gain. Feedback
Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $52,200 each. Dexter's basis in each lot sold is $36,540, and he incurs total selling expenses of $2,088 on each sale. What is the amount of Dexter's capital gain and ordinary income? If required, round your answers to the nearest dollar. Dexter has a realized and recognized gain of $ 488,000 x , of which $ 7,200 x is classified as ordinary income and 47,200 x as a capital gain. Feedback
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 14-24 (Algorithmic) (LO. 2)
Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of 5 1237 and during the tax
year sells the first eight lots to eight different buyers for $52,200 each. Dexter's basis in each lot sold is $36,540, and he incurs total selling
expenses of $2,088 on each sale.
What is the amount of Dexter's capital gain and ordinary income?
If required, round your answers to the nearest dollar.
Dexter has a realized and recognized gain of $
488,000 x , of which
7,200 x is classified as ordinary income and
47,200 x as a capital gain.
Feedback
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Substantial real property development activities may result in the owner being considered a dealer for tax purposes.
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