Problem 7-37 (LO. 6) During 2020, Leisel, a single taxpayer, operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $142,000 and deductions of $420,000, resulting in a loss of $278,000. The large deductions are due to the acquisition of equipment and the use of immediate expense and additional first-year depreciation to deduct all of the acquisitions. Can Leisel use all of this loss to offset other income she has? She may use $ of the $278,000 proprietorship business loss to offset Leisel has an excess business loss of $ . The excess business loss is

Problem 7-37 (LO. 6) During 2020, Leisel, a single taxpayer, operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $142,000 and deductions of $420,000, resulting in a loss of $278,000. The large deductions are due to the acquisition of equipment and the use of immediate expense and additional first-year depreciation to deduct all of the acquisitions. Can Leisel use all of this loss to offset other income she has? She may use $ of the $278,000 proprietorship business loss to offset Leisel has an excess business loss of $ . The excess business loss is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A2
Please show the works
Dengar
6. On May 11, 20x8, Taxpayer purchased an office building for $220,000, of which $30,000 was allocated to the land on which the building was located. The building's salvage value was estimated to be $50,000. What amount will Taxpayer deduct for depreciation on his/her 20x9 federal income tax return? A. $ 3,590 B. 4,870 C. 5,640 D. 6,910 E. None of the above
TB MC Qu. 09-49 (Algo) George operates a business that generated... George operates a business that generated revenues of $58 million and allocable taxable income of $1.33 million. Included in the computation of allocable taxable income were deductible expenses of $244,000 of business interest and $254,000 of depreciation. What is the business interest limitation that George will be subject to this year if the business does not qualify under the gross income test? Multiple Choice O O $498,000 $472,200 $381,000 $322,800 $231,800
TPW, a calendar year taxpayer, sold land with a $549,000 tax basis for $845,000 in February. The purchaser paid $84,500 cash at closing and gave TPW an interest-bearing note for the $760,500 remaining price. In August, TPW received a $60,825 payment from the purchaser consisting of a $38,025 principal payment and a $22,800 interest payment. In the first year after the year of sale, TPW received payments totaling $116,650 from the purchaser. The total consisted of $76,050 principal payments and $40,600 interest payments. Required: For the first year after the year of sale, compute the difference between TPW’s book and tax income resulting from the installment sale method. Is this difference favorable or unfavorable? Using a 21 percent tax rate, determine the effect of the difference on the deferred tax asset or liability generated in the year of sale.
C sold capital property in Year 1 for net proceeds of $200,000. The property has an adjusted cost base of $40,000. C received $120,000 at the time of the sale and a note for the balance to be paid in equal annual instalments over the following two years. What is the minimum taxable capital gain to be reported in Year 2?
A4
pare.3
am. 107.
TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. In August, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment. * I only need Requirement C (box 2) to be solved. Required: c. Compute gain recognized in the year of sale if TPW uses the installment sale method of accounting. Compute TPW’s tax basis in the note at the end of the year.
LO.8 During 2022, Chester (a married taxpayer filing a joint return) had the following transactions involving capital assets: Gain on the sale of an arrowhead collection (acquired as an investment at different times but all pieces have been held for more than 1 year) Loss on the sale of IBM Corporation stock (purchased 11 months ago as an investment) Gain on the sale of a city lot (acquired 5 years ago as an investment) 4 How much income tax results from these capital asset transactions if: a. Chester has taxable income of $378,400? b. Chester has taxable income of $74,125? $ 6,000 (3,500) 2,000