Tell correct option., General Account In 2014, Tim sells Section 1245 property for $28,000 that he had purchased in 2008. Tim has claimed $7,000 in depreciation on theproperty and originally purchased it for $20,000. How much of the gain is taxable as ordinary income?a. $7,000.b. $8,000.c. $13,000.d. $18,000.e. None of the previous choices are correct.

Explanation and SolutionThis question deals with the taxation of gains from the sale of Section 1245…

Answered: In 2014, Tim sells Section 1245…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 66P

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Sissie owns two items of business equipment. Both were purchased in 2015 for 100,000, both have a 7-year MACRS recovery period, and both have an adjusted basis of 37,490. Sissie is considering selling these assets in 2019. One of them is worth 60,000, and the other is worth 23,000. Because both items were used in her business, Sissie simply assumes that the loss on one will be offset against the gain from the other and that the net gain or loss will increase or reduce her business income. What is the amount and character of Sissies gain or loss?
Nicky receives a car from Sam as a gift. Sam paid 48,000 for the car. He had used it for business purposes and had deducted 10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is 33,000. a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation? b. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 32,500. What is her recognized gain or loss? c. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 20,000. What is her recognized gain or loss?
Jacob purchased business equipment for $144,900 in 2018 and has taken $86,940 of regular MACRS depreciation. Jacob sells the equipment in 2021 for $65,205. What is the amount and character of Jacob's gain or loss? If an amount is zero, enter "0". Jacob has § 1245 gain of $fill in the blank 1 and § 1231 gain of $fill in the blank 2.
Jacob purchased business equipment for $144,900 in 2018 and has taken $86,940 of regular MACRS depreciation. Jacob sells the equipment in 2021 for $65,205. What is the amount and character of Jacob's gain or loss? If an amount is zero, enter "0". Jacob has § 1245 gain of $fill in the blank 1 and § 1231 gain of Sfill in the blank 2.
#2) Mr. Norman Low owns a piece of land. It has a cost of $125,000 and a fair market value of $132,000. In July, 2017, Mr. Low sells the asset to his father for $150,000 and his father sells it a month later for $132,000. REQUIRED: Determine the amount of income to be recorded by Mr. Low as a result of the sale to his father. Determine the amount of income to be recorded by Mr. Low’s father as a result of the sale of the land.
Jacob purchased business equipment for $89,100 in 2017 and has taken $53,460 of regular MACRS depreciation. Jacob sells the equipment in 2020 for $40,095. What is the amount and character of Jacob's gain or loss? If an amount is zero, enter "0" Jacob has § 1245 gain of $__________ and § 1231 gain of $__________.
What is the amount and character of the recognized gain or loss?
FRANK PURCHASED EQUIPMENT FOR $50,000 ON MARCH 1, 2014. AS OF TODAY, FRANK HAS TAKEN $20,000 OF DEPRECIATION DEDUCTIONS ON THE EQUIPMENT. DUE TO CURRENT MARKET CONDITIONS, FRANK DECIDES TO SELL THE EQUIPMENT BECAUSE HE CAN SELL IT NOW FOR $60,000. HOW MUCH AND WHAT TYPE OF GAIN DOES FRANK RECOGNIZE WHEN HE SELLS THE EQUIPMENT NOW? A. $30,000 ORDINARY INCOME. B. $30,000 LONG-TERM CAPITAL GAIN. C. $20,000 LONG-TERM CAPITAL GAIN AND $10,000 ORDINARY INCOME. D. $10,000 LONG-TERM CAPITAL GAIN AND $20,000 ORDINARY INCOME.
Steve owns real estate (adjusted basis of $12,000 and fair market value of $15,000), which he uses in his business. Steve sells the real estate for $15,000 to Aubry (a dealer) and then purchases a new parcel of land for $15,000 from Joan (also a dealer). The new parcel of land would normally qualify as like-kind property.
Callie Cooper purchased two pieces of property in 1990: Property Q cost $15,000 and Property R cost $30,000. In 2020, when Callie died, she left the property to her daughter, Christy. At that time, Property Q had appreciated in value to $80,000 while Property R had declined in value, now worth only $10,000. What is Christy’s basis in each piece of property? What are the tax consequences of the changes in value of the properties from the time of original purchase to the death of Callie?
Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total $256,600 51,320 64,150 $372,070 a. How much of the $372,070 purchase price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization? If required, round the final answer to the nearest dollar. Use months, not days, in your computations.
! Required information Problem 14-43 (LO 14-2) (Static) [The following information applies to the questions displayed below.] Sarah (single) purchased a home on January 1, 2008, for $600,000. She eventually sold the home for $800,000. What amount of the $200,000 gain on the sale does Sarah recognize in each of the following alternative situations? (Assume accumulated depreciation on the home is $0 at the time of the sale.) (Leave no answer blank. Enter zero if applicable.) Problem 14-43 Part d (Static) d. Sarah used the home as a vacation home from January 1, 2008, through December 31, 2015. She used the home as her principal residence from January 1, 2016, until she sold it on January 1, 2022. (Round intermediate percentage computation to 2 decimal places.) Gain recognized

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