Question

The following information applies to the questions displayed below. Buckley, an individual, began business two years ago and has never sold a $1231 asset. Buckley has owned each of the assets since he began the business. In the current year, Buckley sold the following business assets: Accumulated Original Cost $ 6,000 Gain/Loss $ (3,000) Asset Depreciation 2000 Computers Machinery Furniture 10.,000 20,000 4,000 (2,000) 7000 12.000 Building 100,000 10,000 (1,000) Assuming Buckley's marginal ordinary income tax rate is 32 percent, answer the questions for the following alternative scenarios: (Loss amounts should be indicated by a minus sign. Input all other amounts as positive values.) Required: a1. What is the amount and character of Buckley's gains or losses for the current year? a2. Calculate Buckley's tax liability or tax savings for the year. Complete this question by entering your answers in the tabs below. Req a2 Req a1 What is the amount and character of Buckley's gains or losses for the current year? Amount Description

Answer 1

ANSWER:

Buckley Sec 1245 gain is $7,000 and his Sec 1231 loss is 6000, calculated as below
Computers	Sec 1231		($3,000)	Loss
Machinery	Sec 1231		-2,000	Loss
Furniture	Sec 1245	Dep. Recapture	7,000	Gain
Building	Sec 1231		-1,000	Loss
Tax liability calculation
	Amount	Tax Rate	Amount of tax
Sec 1231	-6000	32%	-1920
Sec 1245	7000	32%	2240
Net Tax			$    320

_____________________________________________

If you have any query or any Explanation please ask me in the comment box, i am here to helps you.please give me positive rating.

*****************THANK YOU**************