Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation. The adjusted basis of the property.

Question

On August 15, 2021, Bob bought a rental house. The property cost $310,000. Of this, the land was valued at $150,000 and the remaining $160,000 represents the house value. Determine the maximum depreciation that Bob can claim in 2021 using the proper MACRS method. $2,667.20 $2,182.40 $1,697.60 $4,228.40 $2,046.00

Answer 1

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

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On August 15, 2021, Bob bought a rental house. The property cost $310,000. Of this, the land was valued at $150,000 and the remaining $160,000 represents the house value. Determine the maximum depreciation that Bob can claim in 2021 using the proper MACRS method. $2,667.20 $2,182.40 $1,697.60 $4,228.40 $2,046.00

William purchases nonresidential real property costing $300,000 and places it in service in March 2020. What is Lincoln's 2021 depreciation on the property? a. $6,099 b. $7,692 c. $8,637 d. $10,908

Lopez acquired a building on June 1, 2014, for $9,829,900. Compute the depreciation deduction assuming the building is classified as (a) residential and (b) non residential. If required, round your answers to the nearest dollar. a. Calculate Lopez's cost recovery deduction for 2019 if the building is classified as residential rental real estate. _______ b. Calculate Lopez's cost recovery deduction for 2019 if the building is classified as nonresidential real estate._______

Answer 2

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

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Answer 3

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

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Answer 4

Question

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

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Answer 5

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

Answer 6

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

Answer 7

Chapter 8, Problem 18P

a

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The adjusted basis of the property.

Answer 8

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

Answer 9

b

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The recomputed basis of the property.

Answer 10

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

Answer 11

c

To determine

Introduction: Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The amount of ordinary income under section 1245.

Answer 12

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

Answer 13

d

To determine

Introduction:Section 1231 assets are those assets that are held by a business for more than one year.The gain on the sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.If the sold property is held for less than one year, then 1231 gain cannot be applied. Section 1250 is applicable to gain on sale of real property.Under section 1250, any gain related to previously deducted depreciation is attributed to uncaptured depreciation.

The Section 1231 gain.

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Ch. 8 - Alice purchases a rental house on August 22,2019,...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - An asset (not an automobile) put in service in...Ch. 8 - James purchased office equipment for his business....Ch. 8 - Which of the following statements with respect to...Ch. 8 - Which of the following is not true about the MACRS...Ch. 8 - On July 20,2019, Kelli purchases office equipment...Ch. 8 - Which of the following is not considered a limit...Ch. 8 - In 2019, Ben purchases and places in service a new...Ch. 8 - In 2019, Ben purchases and places in service a new...

Solution Summary: The author explains that Section 1231 assets are held by a business for more than one year. Gain on sale of these assets is taxed at the lower capital gain tax rate and the rate of ordinary income tax.

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