Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2021, for $850,000. What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship? a. If Heron is a C corporation, what is the amount of each type of gain recognized? If an amount is zero, enter "0". Round your answers to the nearest dollar. Character of Gain Ordinary income under § 1245. Ordinary income under § 1250 Ordinary income under § 291 § 1231 gain Total recognized gain 287,492 X Total recognized gain 0 57,498 429,994 487,492 ✓ b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized? Character of Gain Ordinary income under § 1245 Ordinary income under 5 1250 Ordinary income under § 291 § 1231 gain 0 0 0 487,492 487,492

Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2021, for $850,000. What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship? a. If Heron is a C corporation, what is the amount of each type of gain recognized? If an amount is zero, enter "0". Round your answers to the nearest dollar. Character of Gain Ordinary income under § 1245. Ordinary income under § 1250 Ordinary income under § 291 § 1231 gain Total recognized gain 287,492 X Total recognized gain 0 57,498 429,994 487,492 ✓ b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized? Character of Gain Ordinary income under § 1245 Ordinary income under 5 1250 Ordinary income under § 291 § 1231 gain 0 0 0 487,492 487,492

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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