Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 17, Problem 27CE
To determine
Identify the amount of §1231 gain is taxed as unrecaptured §1250 gain.
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3.
Jake purchased a $235,000 crane for his construction business. He sold the crane for $175,000 after taking $115,000 of depreciation. Assume Jake is
a. On what form would the gain or loss originally be reported?
b. What is the amount of gain or loss on the sale?
c. What amount of the gain or loss is subject to ordinary tax rates?
D4
Chapter 17 Solutions
Individual Income Taxes
Ch. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - A depreciable business dump truck has been owned...Ch. 17 - Prob. 9DQCh. 17 - Prob. 10DQ
Ch. 17 - Prob. 11DQCh. 17 - Prob. 12DQCh. 17 - Prob. 13DQCh. 17 - Prob. 14DQCh. 17 - Prob. 15DQCh. 17 - Prob. 16DQCh. 17 - Prob. 17DQCh. 17 - Prob. 18DQCh. 17 - Prob. 19DQCh. 17 - Prob. 20DQCh. 17 - Prob. 21CECh. 17 - Prob. 22CECh. 17 - LO.3 Renata Corporation purchased equipment in...Ch. 17 - LO.3 Jacob purchased business equipment for 56,000...Ch. 17 - Sissie owns two items of business equipment. Both...Ch. 17 - Prob. 26CECh. 17 - Prob. 27CECh. 17 - LO.4 Enzo is a single taxpayer with the following...Ch. 17 - Prob. 29CECh. 17 - Prob. 30CECh. 17 - LO.1, 2 Jenny purchased timber on a 100-acre tract...Ch. 17 - Prob. 32PCh. 17 - LO.2 A sculpture that Korliss Kane held for...Ch. 17 - Prob. 34PCh. 17 - Prob. 35PCh. 17 - Prob. 36PCh. 17 - Prob. 37PCh. 17 - Prob. 38PCh. 17 - Prob. 39PCh. 17 - Prob. 40PCh. 17 - Prob. 41PCh. 17 - Prob. 43PCh. 17 - Joanne is in the 24% tax bracket and owns...Ch. 17 - Prob. 45PCh. 17 - Prob. 46PCh. 17 - Prob. 47PCh. 17 - Prob. 48PCh. 17 - Prob. 49PCh. 17 - Jasmine owned rental real estate that she sold to...Ch. 17 - Prob. 51PCh. 17 - Prob. 52PCh. 17 - Prob. 53PCh. 17 - Prob. 54PCh. 17 - Jay sold three items of business equipment for a...Ch. 17 - Prob. 1RPCh. 17 - Prob. 2RPCh. 17 - Prob. 3RPCh. 17 - Prob. 4RPCh. 17 - Prob. 1CPACh. 17 - Prob. 2CPACh. 17 - Jerry uses a building for business purposes. The...Ch. 17 - Prob. 4CPACh. 17 - Prob. 5CPACh. 17 - Prob. 6CPACh. 17 - Wally, Inc., sold the following three personal...Ch. 17 - Net Section 1231 losses are: a. Deducted as a...Ch. 17 - Prob. 9CPACh. 17 - Prob. 10CPA
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- Kk.417.arrow_forwardA taxpayer had the following dealings in properties: Short-term capital gain 200,000.00 Long-term capital gain Short-term ordinary gain 100,000.00 50,000.00 Long-term ordinary gain 150,000.00 Short-term capital loss 100,000.00 Long-term capital loss 150,000.00 Short-term ordinary loss 200,000.00 Long-term ordinary loss 120,000.00 Assuming that the taxpayer is an individual, compute respectively the total items of gross income and the total items of deductions from gross income 200,000; 260,000 O 350,000; 260,000 500,000; 320,000 275,000; 320,000arrow_forwardJ6. Which of the following statements is correct regarding rental properties? A. Each rental property purchased that cost $50,000 or more must be placed in a separate CCA class. B. Rental losses from CCA can be used to shield income from employment or from business. C. A corporation whose principle business is property rental or leasing cannot create a loss by CCA. D. CCA deductions can create or increase a net loss from all of a taxpayer’s rental properties combined.arrow_forward
- Which of the following statements is incorrect? Assume that the rental activity is classified as ‘production-of-income.’ If the taxpayer sells the rental property later at a loss, the loss will be treated as a capital loss (i.e., $3,000/$1,500 deduction limit in the current year). An amount that would have been paid in an arm’s-length transaction is considered a reasonable amount as deduction. Payment (except for medical or educational expense) of another person’s obligation does not result in a tax deduction for the payer. Regarding the start-up costs, if the new business is in the same line of business as the existing one and if the new business is not launched, then none of the start-up costs are deductible. Payments for a speeding ticket are nondeductible. HELParrow_forward! Required information [The following information applies to the questions displayed below.] Rubio recently invested $23,000 (tax basis) in purchasing a limited partnership interest in which he will have no management rights in the company. His at-risk amount is $17,100. In addition, Rubio's share of the limited partnership loss for the year is $25,900, his share of income from a different limited partnership is $5,450, and he has $43,000 in wage income and $11,500 in long-term capital gains. c. How much of Rubio's $25,900 loss from the limited partnership can he deduct in the current year considering all limitations? Deductible loss → Show Transcribed Text b. How much of the loss from part (a) is allowed under the at-risk limitations? Loss allowed as per at-risk limitationarrow_forwardThe tax law requires that capital gains and losses be separated from other types of gains and losses. Among the reasons for this treatment are: a."Long-term capital gains may be taxed at a lower rate than ordinary gains" and "Net capital loss is deductible only up to $3,000 per year for individual taxpayers". b.Short-term capital losses are not deductible. c.Net capital loss is deductible only up to $3,000 per year for individual taxpayers. d.Long-term capital gains may be taxed at a lower rate than ordinary gains.arrow_forward
- 1. According to the article by Tony Dimitriadis (see Supplementary Study Materials Folder), whether an amount received by a taxpayer following the sale of a capital asset (e.g. real estate) will be treated as capital or income depends largely on: Select one: The intention of the taxpayer when the property was first acquired The degree of renovation and development carried out on the property Whether the taxpayer held on to the property, rather than making a short term profit Whether the taxpayer is an individual or a business taxpayer All of the above are important considerations 2. Select the INCORRECT statement from the following options: Select one: The Cost Base of Personal Use Assets excludes Element 3 expenses (Ownership Costs) An antique vase bought at a garage sale for $200 and sold for $20,000 is exempt from CGT The indexation rate for assets acquired on 2 February 1986 was 41.4 All costs incurred under Element 3 (Ownership Costs) should be included in the indexation…arrow_forwardFor individual taxpayers, capital losses can be: deducted for AGI to the extent of capital gains included in the taxpayer's gross income. deducted from AGI to the extent of capital gains included in the taxpayer's gross income. deducted for AGI to the extent of capital gains included in the taxpayer's gross income plus $3,000. deducted from AGI to the extent of capital gains included in the taxpayer's gross income plus $3,000.arrow_forwardN3.arrow_forward
- 2. S1: The excess of allowable deductions over gross sales is net operating loss. S2: Net operating loss is a deduction from gross income even if the taxpayer chose optional standard deduction. S3: If net operating loss is incurred in 2021, the taxpayer can carry over the loss in the immediately succeeding three (3) years Which is TRUE?arrow_forwardWhat is it called when a taxpayer is required to increase their income because they have taken more CCA over the lifetime of a pool of assets than what they are entitled to take?arrow_forwardReview Examples 50 and 52 (Section 1231 Computations) in the text. In both examples, the taxpayer's AGI is $129,400 even though in Example 52 there is $700 of nonrecaptured § 1231 loss from 2018. As part of the § 1231 lookback provision any net gain is______(either added to or offset against) any ______(either, nonrecaptured net § 1231 losses or recaptured net § 1231 losses) from the______ (either two three or five) prior tax years. Therefore, the $700 from 2018 results in part of the 2019 net § 1231 gain to be treated as_______(either a capital gain a nontaxable gain or ordinary income) Please fill in the blanks?arrow_forward
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