Sergio, a sole proprietor, purchased a van for $35,000 to use exclusively in his delivery business. Six months later, he soldthe van for $38,000. Sergio's $3,000 gain from the sale of this property should be reported as:O Gross receipts or sales on Schedule C, Part I.A gain from the sale or exchange of property used in a trade or business on Form 4797, Part I.An ordinary gain on Form 4797, Part II.O A gain from the disposition of property on Form 4797, Part III.

Gain on the sale of assets refers to the amount of money that is earned when an asset is sold for…

Sergio, a sole proprietor, purchased a van for $35,000 to use exclusively in his delivery business. Six months later, he sold the van for $38,000. Sergio's $3,000 gain from the sale of this property should be reported as: 00 Gross receipts or sales on Schedule C, Part I. A gain from the sale or exchange of property used in a trade or business on Form 4797, Part I. An ordinary gain on Form 4797, Part II. A gain from the disposition of property on Form 4797, Part III.

Sergio, a sole proprietor, purchased a van for $35,000 to use exclusively in his delivery business. Six months later, he sold the van for $38,000. Sergio's $3,000 gain from the sale of this property should be reported as: 00 Gross receipts or sales on Schedule C, Part I. A gain from the sale or exchange of property used in a trade or business on Form 4797, Part I. An ordinary gain on Form 4797, Part II. A gain from the disposition of property on Form 4797, Part III.

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

3
Architect, a cash basis taxpayer, has been conducting a business as a sole proprietorship for several years. Architect decides to incorporate, and on July 1 of the current year he forms Design, Inc., to which he transfers the following assets: Asset A.B. FMV Accounts Receivable $ 0 $ 60,000 Supplies 0 20,000 Unimproved Land 60,000 120,000 Total $ 60,000 200,000 The supplies were acquired nine months ago and their cost was immediately deducted by Architect as an ordinary and necessary business expense. In exchange, Architect receives 100 shares of Design common stock with a FMV of $100,000. In addition, Design assumes $70,000 of accounts payable to trade creditors of Architect's sole proprietorship and a $30,000 bank loan incurred by Architect two years ago for valid business reasons. Design elects to…
16. Erwin Company, a calendar year taxpayer, made only two purchases of depreciable personalty this year. The first purchase was five-year recovery property costing $312,800, and the second purchase was seven-year recovery property costing $574,000. Compute Erwin's first-year MACRS depreciation with respect to the personalty assuming that a. The first purchase occurred on February 2, and the second purchase occurred on June 18. b. The first purchase occurred on February 2, and the second purchase occurred on October 13.
Hardev
1. George operates a business that generated revenues of $50 million and allocable taxable income of $560,000. Included in the computation of allocable taxable income were $900,000 of business interest expense, $20,000 of business interest income, and $180,000 of depreciation. What is the maximum business interest deduction that George will be eligible to claim this year if the business does not qualify under the gross income test? a) $168,000 b) $560,000 c) $612,000 d) $452,000 2. Mike started a calendar-year business on September 1stSeptember 1st of this year by paying 12 months of rent on his shop at $550 per month. What is the maximum amount of rent that Mike can deduct this year under each type of accounting method? a) $6,600 under the cash method and $6,600 under the accrual method b) $6,600 under the cash method and $2,200 under the accrual method c) $2,200 under the cash method and $2,200 under the accrual method d) $2,200 under the cash method and zero under the…
Jason sold various business-use assets in Year 10 resulting in a net Section 1231 gain of $8,100. Jason had the following net Section 1231 gains and losses in the previous years: Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 ($4,000) ($2,900) $5,100 Year 10 $1,100 ($5,400) $4,400 How is the Year 10 net Section 1231 gain of $8,100 treated? (Do not leave any field blank. If answer is zero, please enter O for the amount.) $ Ordinary Loss $ Ordinary Income $ LTCG Gain
11. Subject :- Accounting Sumner sold equipment that it uses in its business for $30,800. Sumner bought the equipment a few years ago for $79,600 and has claimed $39,800 of depreciation expense. Assuming that this is Sumner's only disposition during the year, what is the amount and character of Sumner's gain or loss? Multiple Choice $9,000 §1231 loss. $9,000 §1245 loss. $48,800 ordinary loss. $9,000 capital loss. None of the choices are correct.
Casey transfers property with a tax basis of $2,840 and a fair market value of $6,600 to a corporation in exchange for stock with a fair market value of $4,800 and $450 in cash in a transaction that qualifies for deferral under section 351. The corporation assumed a liability of $1,350 on the property transferred. Casey also incurred selling expenses of $372. What is the amount realized by Casey in the exchange? Multiple Choice $6,600 $6,228 $6,128 $5,678
Henry and Jane, MFJ (taxable income is $305,000 before considering any of the items below), sold the following assets during the year: Asset Sale Price Tax Basis Gain or Loss Holding Period ABC Stock $ 51,000 $ 25,500 $ 25,500 More than One Year XYZ Stock $ 13,000 $ 9,750 $ 3,250 Less than One Year Stamp Collection $ 11,000 $ 5,500 $ 5,500 More than One Year RST Stock $ 14,000 $ 20,000 $ (6,000) Less than One Year Rental Home $ 101,000 $ 50,500* $ 50,500 More than One Year *$25,250 of the gain is a 25 percent gain. The remaining gain is 0% or 15% or 20%. Henry also has $5,000 of dividends which are not included in the $305,000. What is Henry’s total tax liability?
An individual transfers $5,000 and a piece of land to a corporation in exchange for all of its stock. At the time of transfer, the land has an adjusted basis of $50,000 and a fair market value (FMV) of $75,000. The corporation assumes a $60,000 mortgage on the land as part of the transfer for a bona fide business purpose. What is the effect of the transfer?
Voytek transfers land worth $200,000 with an adjusted basis of $17,000 to his wife Gosha for her birthday. The land was purchased 3 years ago. Assume no gift tax was paid on the transfer. a) Does Gosha have gross income as a result of the gift? Yes or No. No? b If the answer is no, Explain why. c)What is Gosha basis in the land? d)What is Gosha holding period in the land?