Ms. Jennie Smith owns a house in Ottawa. She purchased the house in 2002 for$122000. In June 2019, she sold the house for $220000 and designated the houseas a principal residence for 5 years. Determine the minimum taxable capital gain thatshe must report on the 2019 sale of the house, after considering the principalresidence exemption.Round to the nearest dollar. Do NOT write commas, dollar signs, or decimals in yourresponse.Your Answer:Answer

A capital gain refers to the profit generated when an individual or entity sells a capital asset for…

Answered: Ms. Jennie Smith owns a house in…

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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Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn’t want to take bonus depreciation for 2021 or 2022) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) The vehicle cost $30,800, and business use is 100 percent (ignore §179 expense).
On July 17, 2019, Ari purchases office furniture (7-year property) costing $50,000 for use in her business. She wishes to use the Section 179 election but does not elect to use bonus depreciation. Her taxable income before the Section 179 depreciation deduction is $25,000. What is the maximum total cost recovery deduction Ari can take for the current year?
On AUgust 8, 2019 Sam, single, age 62, sold for $21000 his principal residence, which he lived in for 10 years, and which had an adjusted basis of $60,000. On November 1, 2019, he purchased a new residence for $80,ooo. For 2019, Sam should recognize a gain on the sale of his residence of:
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Katrina, age 58, rented (as a tenant) the house that was her principal residence from January 1, 2019 through December 31, 2020. She purchased the house on January 1, 2021, for $150,000 and continued to occupy it through June 30, 2022. She leased it to a tenant from July 1, 2022, through December 31, 2023. On January 1, 2023, she sells the house for $350,000. She incurs a realtor’s commission of $20,000. (1) Calculate her recognized gain if her objective is to minimize the recognition of gain and she does not intend to acquire another residence. (2) Explain your answer.
In February of 2023 during the preparation of Julia's 2022 return, you explained to her options for usingn either the section 179 deduction or special depreciation for the purchase of her 2022 assets. In her first few years in business, she was learning so much, depreciation was too confusing for her. when you showed her the tax savings she would receive to benefit her for 2022 , she understood how this might change her choices for additional larger assets she may purchase in 2023. If Julia decided to use special depreciation for the assets purchased in 2022, Julia's refund would increase by what amount ?
During 2021, William purchases the following capital assets for use in his catering business: New passenger automobile (September 30). $64,000 Baking equipment (June 30) 10,000 Assume that William decides to use the election to expense on the baking equipment (and has adequate taxable income to cover the deduction) but not on the automobile (which has a 5-year recovery period), and he also uses the MACRS accelerated method to calculate depreciation but elects out of bonus depreciation. Calculate William's maximum depreciation deduction for 2021, assuming he uses the automobile 100 percent in his business.
On June 15, 2023, Chang purchases $2,937,000 of equipment (seven-year property) for use in their business. It is their only purchase of business property in 2023. Chang has taxable income from their business of $2.5 million before any cost recovery. Click here to access depreciation Table 8-2. (If required, round your answers to the nearest dollar.) a. Assuming Chang does not elect Section 179 and elects out of bonus depreciation, what is their total 2023 cost recovery? $ 419,697 b. Assuming Chang elects the maximum Section 179 deduction allowable and elects out of bonus depreciation, what is their total 2023 cost recovery? 2,937,000 × $ c. Assuming Chang elects the maximum Section 179 deduction allowable and does not elect out of bonus depreciation, what is their total 2023 cost recovery? 2,937,000 ×
5. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1,500Advise the Capital Gain Tax Consequences for the above transactions, please have a look at the matrixbelow on how to answer the question
Tim receives a $25,000 gift from his parents for a down payment on a house. They know he cannot buy a house without their help. They write “gift” in the memo line of the check. How much of the gift is taxable to Tim? In your response, please make sure to take all of the facts above into consideration. You can refer back to the text, lecture videos, and the IRS website. Please make sure to support whatever conclusion you decide to present.
y applies to the questions displayed below. Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn't want to take bonus depreciation for 2021 or 2022) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1. Table 2. and Exhibit 10-10.) Problem 10-67 Part c (Algo) c. The vehicle cost $80,100, and she used it 80 percent for business. Year Depreciation deduction 2021 2022 Lina purchased a new car for use in her business during 2021. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2021 and 2022 (Lina doesn't want…
[The following information applies to the questions displayed Lina purchased a new car for use in her business during 2023. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including $179 expense unless stated otherwise) for the automobile in 2023 and 2024 (Lina doesn't want to take bonus depreciation for 2023 or 2024) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) Problem 10-67 Part b (Algo) b. The vehicle cost $82,600, and business use is 100 percent. Year Depreciation deduction 2023 2024 Q Search S < Prev 7 8 11 of 20

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