Lena is a sole proprietor. In April of this year, she sold equipment purchased four years ago for $42,000 with an adjusted basis of $25,200for $27,720. Later in the year, Lena sold another piece of equipment purchased two years ago with an adjusted basis of $12,600 for$8,190.What are the tax consequences of these tax transactions?Lena has an ordinary gainLena has a § 1231 lossof $✔ of $X from the sale of the first equipment.X from the sale of the second equipment.

We can determine the adjusted loss or gain using the formula below:Adjusted Gain/Loss = Selling…

Answered: Lena has an ordinary gain Lena has a §…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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All the following are exampies of non-taxable income, except Select one O a. Proceeds received as beneficiary of a life insurance contract due to the death of the insured O b. income from illegal activities OC Shares of stock received as an inheritance O d. Cash received as a gift Oe All of these are non-taxable
In order to be eligible to exclude gain on the sale of a principal residence, the taxpayer must meet which of the following tests? ○ Ownership test ○ Use test and ownership test Business use test ○ Use test
Da
The taxpayers net capital gain is zero if the taxpayer has a net long-term capital loss. True or false
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12. COMPUTE: Total special deductions 13. COMPUTE: Net taxable estate 14. COMPUTE: Estate tax payable
Required Information [The following information applies to the questions displayed below.] Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as §1231 assets. The first is machinery and will generate a $31,250 §1231 loss on the sale. The second is land that will generate a $15,200 §1231 gain on the sale. Aruna's ordinary marginal tax rate is 32 percent. Note: Input all amounts as positive values. a. Assuming she sells both assets in December of year 1 (the current year), what effect will the sales have on Aruna's tax liability? Aruna's tax will decrease by
(LO. 3) For each of the following independent transactions, calculate the recognized gain or loss to the seller and the adjusted basis to the buyer. If an amount is zero, enter "0". a. Kiera sells Parchment, Inc. stock (adjusted basis $29,000) to Phillip, her brother, for its fair market value of $2,800. b. Darnell sells land (adjusted basis $89,000) to his nephew, Boyd, for its fair market value of $41,800. c. Susan sells a tax-exempt bond (adjusted basis $43,300) to her wholly owned corporation for its fair market value of $23,300. d. Sinbad sells a business truck (adjusted basis $17,400) that he uses in his sole proprietorship to his cousin, Agnes, for its fair market value of $11,000. e. Martha sells her partnership interest (adjusted basis $149,600) in Pearl Partnership to her adult daughter, Kim, for $193,100. Seller's Recognized Gain/Loss Recognized gain Recognized loss Buyer's Adjusted Basis 1111
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Lena has an ordinary gain Lena has a § 1231 loss ✔ of $ of $ X from the sale of the first equipment. X from the sale of the second equipment.