It will be taxed at the tax rates that apply to: Long-term capital gains. Ordinary income. The sale of qualified small business stock. Unrecaptured Section 1250 gains.
It will be taxed at the tax rates that apply to: Long-term capital gains. Ordinary income. The sale of qualified small business stock. Unrecaptured Section 1250 gains.
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 35P
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Transcribed Image Text:In 2023, Malcolm decided to sell all of the business assets he had been using in his sole proprietorship. He
had owned and used the assets in his business for several years.
The business sale agreement specified that $280,000 of the $400,000 total sales price was allocable to a
commercial building, and $20,000 was allocable to the land to which the building is attached. Malcolm had
purchased the property several years ago, and he used it exclusively for business purposes during the
period he owned it. Assuming Malcolm has a gain from the sale of his business assets, how will the gain
from the sale of the land be treated for tax purposes?
It will be taxed at the tax rates that apply to:
Long-term capital gains.
Ordinary income.
The sale of qualified small business stock.
Unrecaptured Section 1250 gains.
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