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On March 6, 2016, Cloe Company acquired an office building for $9,700,000 (with $700,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on June 22, 2020, for $8,700,000. Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property. If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar. a. Compute the cost recovery and adjusted basis for the building. The cost recovery is and the adjusted basis for the building is b. What are the amount and nature of Cloe's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured $1250 gain? There is S of recognized loss on the sale of the property, of which a is subject to 5 1250 recapture.

On March 6, 2016, Cloe Company acquired an office building for $9,700,000 (with $700,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on June 22, 2020, for $8,700,000. Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property. If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar. a. Compute the cost recovery and adjusted basis for the building. The cost recovery is and the adjusted basis for the building is b. What are the amount and nature of Cloe's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured $1250 gain? There is S of recognized loss on the sale of the property, of which a is subject to 5 1250 recapture.

FINANCIAL ACCOUNTING
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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For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 4 5 6 7 8 10 11 1 2-18 19-27 28 29 1 2-19 20-31 32 33 1 2 3 3.485 3.182 2.879 2.576 2.273 1.970 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3637 3.637 3.637 1.970 2.273 3.182 3.485 3.637 2.879 0.000 For Property Placed in Service after December 31, 1986, and before May 13, 1993:31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 1 3 4 5 6 7 8 9 10 11 0.661 0.397 1.190 0.926 3.175 3.175 3.175 3.175 3.174 3.174 3.174 3.174 3.175 3.175 3.175 3.175 3.175 0.397 0.661 0.926 1.190 1.455 Recovery Year(s) 9 1.667 1.061 0.758 1.364 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.636 3.636 3.637 3.636 3.636 3.636 2.576 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1.364 1.667 1 2-39 40 3.042 3.175 3.174 1.720 0.000 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property 2 2.778 2.513 2.249 1.984 1.720 1.455 3.175 3.175 3.175 3.175 3.175 3,175 3.174 3.174 3.174 3.174 3.174 3.174 1.984 2.249 2513 2.778 3.042 3.175 0.000 0.000 0.000 0.000 0.000 0.132 12 0.455 0.152 3.636 3.636 3.637 3.636 9 0.535 0.963 0.749 2.564 2.564 1.605 1.819 2.033 2.564 The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is Placed in Service): 1 2 3 5 8 10 11 7 2,461 2.247 2.033 1.819 1.005 1.391 1.177 2.564 2.564 2.564 2.564 2.564 2.564 2.564 0.107 0.321 0.535 0349 0.963 1.177 1.391 12 0.132 3.175 3.174 0.321 2.564 2247 12 0.107 2.564 2.461
Transcribed Image Text:For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 4 5 6 7 8 10 11 1 2-18 19-27 28 29 1 2-19 20-31 32 33 1 2 3 3.485 3.182 2.879 2.576 2.273 1.970 3.636 3.636 3.636 3.636 3.636 3.636 3.637 3.637 3637 3.637 3.637 1.970 2.273 3.182 3.485 3.637 2.879 0.000 For Property Placed in Service after December 31, 1986, and before May 13, 1993:31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property Is Placed in Service): Year(s) 1 3 4 5 6 7 8 9 10 11 0.661 0.397 1.190 0.926 3.175 3.175 3.175 3.175 3.174 3.174 3.174 3.174 3.175 3.175 3.175 3.175 3.175 0.397 0.661 0.926 1.190 1.455 Recovery Year(s) 9 1.667 1.061 0.758 1.364 3.636 3.636 3.636 3.636 3.637 3.637 3.637 3.637 3.636 3.636 3.637 3.636 3.636 3.636 2.576 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1.364 1.667 1 2-39 40 3.042 3.175 3.174 1.720 0.000 For Property Placed in Service after May 12, 1993: 39-Year Nonresidential Real Property 2 2.778 2.513 2.249 1.984 1.720 1.455 3.175 3.175 3.175 3.175 3.175 3,175 3.174 3.174 3.174 3.174 3.174 3.174 1.984 2.249 2513 2.778 3.042 3.175 0.000 0.000 0.000 0.000 0.000 0.132 12 0.455 0.152 3.636 3.636 3.637 3.636 9 0.535 0.963 0.749 2.564 2.564 1.605 1.819 2.033 2.564 The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is Placed in Service): 1 2 3 5 8 10 11 7 2,461 2.247 2.033 1.819 1.005 1.391 1.177 2.564 2.564 2.564 2.564 2.564 2.564 2.564 0.107 0.321 0.535 0349 0.963 1.177 1.391 12 0.132 3.175 3.174 0.321 2.564 2247 12 0.107 2.564 2.461
On March 6, 2016, Cloe Company acquired an office building for $9,700,000 (with $700,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on June 22, 2020, for $8,700,000. Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property. If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar.. a. Compute the cost recovery and adjusted basis for the building. The cost recovery is s and the adjusted basis for the building is $ b. What are the amount and nature of Cloe's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured § 1250 gain? There is on the sale of the property, of which of recognized loss is subject to 5 1250 recapture.
Transcribed Image Text:On March 6, 2016, Cloe Company acquired an office building for $9,700,000 (with $700,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on June 22, 2020, for $8,700,000. Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property. If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar.. a. Compute the cost recovery and adjusted basis for the building. The cost recovery is s and the adjusted basis for the building is $ b. What are the amount and nature of Cloe's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured § 1250 gain? There is on the sale of the property, of which of recognized loss is subject to 5 1250 recapture.
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