Problem 11-62 Part-b (Static) b. Baker received $450,000 in insurance proceeds and spent $500,000 rebuilding the building during the current year. Description Basis of replacement property Amount
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Required information
Problem 11-62 (LO 11-6) (Static)
[The following information applies to the questions displayed below.]
Baker Corporation owned a building located in Kansas. Baker used the building for its business operations. Last year, a
tornado hit the property and completely destroyed it. This year, Baker received an insurance settlement. Baker had
originally purchased the building for $350,000 and had claimed a total of $100,000 of depreciation deductions against the
property.
What are Baker's realized and recognized gain or (loss) on this transaction and what is its basis in the new building in the
following alternative scenarios?
Note: Leave no answers blank. Enter zero if applicable.
Problem 11-62 Part-b (Static)
b. Baker received $450,000 in insurance proceeds and spent $500,000 rebuilding the building during the current year.
Description
Basis of replacement property
Amount](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffc40a322-3d86-47f9-a368-495dd1d8c140%2Fa5fa1f3d-61c5-4893-9b82-61850c04ef2c%2Frmu47ck_processed.jpeg&w=3840&q=75)
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- ! Required information [The following information applies to the questions displayed below.] In year 0, Longworth Partnership purchased a machine for $64,750 to use in its business. In year 3, Longworth sold the machine for $43,200. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $23,900. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) b. What is the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $67,500? Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) $1231 gain/(loss)Required information [The following information applies to the questions displayed below.] In year 0, Longworth Partnership purchased a machine for $64,750 to use in its business. In year 3, Longworth sold the machine for $43,200. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $23,900. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) c. What is the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are decreased to $16,500 (before the $1231 netting process, if applicable)? Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Los) $1231 gain/(loss)Baker Corporation owned a building located in Kansas. Baker used the building for its business operations. Last year, a tornado hit the property and completely destroyed it. This year, Baker received an insurance settlement. Baker had originally purchased the building for $350,000 and had claimed a total of $100,000 of depreciation deductions against the property. What are Baker's realized and recognized gain or (loss) on this transaction and what is its basis in the new building in the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) d. Baker received $450,000 in insurance proceeds and spent $450,000 rebuilding the building during the next three years. Description Amount Basis of replacement property
- Baker Corporation owned a building located in Kansas. Baker used the building for its business operations. Last year, a tornado hit the property and completely destroyed it. This year, Baker received an insurance settlement. Baker had originally purchased the building for $350,000 and had claimed a total of $100,000 of depreciation deductions against the property. What are Baker's realized and recognized gain or (loss) on this transaction and what is its basis in the new building in the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) c. Baker received $450,000 in insurance proceeds and spent $400,000 rebuilding the building during the current year. Description Amount Basis of replacement propertyBaker Corporation owned a building located in Kansas. Baker used the building for its business operations. Last year, a tornado hit the property and completely destroyed it. This year, Baker received an insurance settlement. Baker had originally purchased the building for $350,000 and had claimed a total of $100,000 of depreciation deductions against the property. What are Baker's realized and recognized gain or (loss) on this transaction and what is its basis in the new building in the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) a. Baker received $450,000 in insurance proceeds and spent $450,000 rebuilding the building during the current year. Description Amount Basis of replacement propertyJason's company purchases a building on a lot on April 2nd 2002, costing a total of $400,000, that includes all preparatory costs. The building on the lot is worth $150,000. Out of desperation and economic conditions that were outside control, his company then sells the lot and building for $500,000 on January 28th, 2003. Assuming the building is non-residential real property, calculate the MACRS depreciation for 2002 & 2003. Show the working clearly.
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