[The following information applies to the questions displayed below.] Tonya Jefferson (single), a sole proprietor, runs a successful lobbying business in Washington, DC. She doesn't sell many business assets, but she is planning on retiring and selling her historic townhouse, from which she runs her business, to buy a place somewhere sunny and warm. Tonya's townhouse is worth $1,000,000 and the land is worth another $1,000,000. The original basis in the townhouse was $600,000, and she has claimed $250,000 of depreciation deductions against the asset over the years. The original basis in the land was $500,000. Tonya has located a buyer that would like to finalize the transaction in December of the current year. Tonya's marginal ordinary income tax rate is 35 percent, and her capital gains tax rate is 20 percent.   b. In addition to the original facts, assume that Tonya reports the following nonrecaptured net §1231 loss:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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[The following information applies to the questions displayed below.]

Tonya Jefferson (single), a sole proprietor, runs a successful lobbying business in Washington, DC. She doesn't sell many business assets, but she is planning on retiring and selling her historic townhouse, from which she runs her business, to buy a place somewhere sunny and warm. Tonya's townhouse is worth $1,000,000 and the land is worth another $1,000,000. The original basis in the townhouse was $600,000, and she has claimed $250,000 of depreciation deductions against the asset over the years. The original basis in the land was $500,000. Tonya has located a buyer that would like to finalize the transaction in December of the current year. Tonya's marginal ordinary income tax rate is 35 percent, and her capital gains tax rate is 20 percent.

 

b. In addition to the original facts, assume that Tonya reports the following nonrecaptured net §1231 loss:

 

Year Net §1231 Gains/(Losses)
Year 1 $ (200,000)
Year 2 0
Year 3 0
Year 4 0
Year 5 0
Year 6 (current year) ?
 
  1. b3. What effect does the gain or loss have on her year 6 (the current year) tax liability?
Answers: 217,500,197,500 and 242500  and 201,231 are all wrong (Help me please)
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