Distinguish capital assets from ordinary assets.
Distinguish capital assets from ordinary assets.
Homework Answers
As per Tax code, Capital Assets means the assets held by the tax payer which is used for conducting trade or business of Tax Payer. In other sense on Capital assets taxpayer is eligible to deduct depreciation and depreciation allowance is allowed by IRS. These assets when sold attract capital gain or loss.
On the other hand Ordinary Assets are the assets which are held by the taxpayer for sale in normal course of business like Stock-in Trade or inventories.
Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income...
Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income property (property which, if sold, results in ordinary income). Assume that all of the property is held for more than one year. a. XYZ Corporation owns land used as an employee parking lot. How is the parking lot classified for tax purposes? b. Montana Corporation owns land held as an investment. How is the land classified for tax purposes? c. John, a self-employed electrician,...
(2. Capital Gains and Losses. (Obj. 2) a. Distinguish between long-term capital gain and short-term capital...
(2. Capital Gains and Losses. (Obj. 2) a. Distinguish between long-term capital gain and short-term capital gain for capital assets acquired January 10, 2017. b. If an individual has gains and losses from the sale of stocks and other investments, what form or schedule is used to support the capital gain or loss reported on Form 1040?
Calculate how much McDonald would have in ordinary income, ordinary loss, capital gain, or capital loss if any per t...
Calculate how much McDonald would have in ordinary income, ordinary loss, capital gain, or capital loss if any per the information provided below: Current Yr 1231 Assets Gain/(Loss) Recognized Asset 1 15,000 Asset 2 (25,000) Asset 3 5,000 Last 5 years 1231 Gain/Losses Gain/(Loss) Recognized 1 - 2 - 3 - 4 (5,000) 5 (2,500) Ordinary Income A Ordinary Loss B Capital Gain C Capital Loss D
2 POINTS (6) Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income...
2 POINTS (6) Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income property (property which, if sold, results in ordinary income). Assume that all of the property is held for more than one year. a. XYZ Corporation owns land used as an employee parking lot. How is the parking lot classified for tax purposes? b. Montana Corporation owns land held as an investment. How is the land classified for tax purposes? c. John,...
2. a) Distinguish reserves from share capital. (5 Marks) b) The trial balance of plastics ltd...
2. a) Distinguish reserves from share capital. (5 Marks) b) The trial balance of plastics ltd as at 31 October 2004 is as follows sh’000’ sh’000’ Ordinary shares capital of sh 50 each 10,000 10% preference share of sh 100 each 9,000 105 debentures 8,000 Land and buildings (NBV) 25,000 Plant and machinery (NBV) 8,000 Motor vehicles (NBV) 2,000 Inventory 6,000 Accounts receivable and payable 20,000 19,000 Capital redemption reserve 6,000 Cash at bank 4,100 Share premium 4,000 Retained profits...
Share Capital of P Ltd is 400,000 ordinary shares. Share Capital of E Ltd is 100,000...
Share Capital of P Ltd is 400,000 ordinary shares. Share Capital of E Ltd is 100,000 ordinary shares. Share Capital of F Ltd is 100,000 ordinary shares Share Capital of G Ltd is 100,000 ordinary shares P Ltd acquired its 100% interest in E Ltd for cash consideration of $100,000 in January 20X1 and E Ltd share capital is $100,000. P Ltd acquired its 100% interest in F Ltd for cash consideration of $230,000 in February 20X2 when F Ltd's...
the depreciation recapture provisions are designed to prevent taxpayers from converting capital gains into ordinary income...
the depreciation recapture provisions are designed to prevent taxpayers from converting capital gains into ordinary income true or false
Koil Corporation generated $742,000 ordinary income from the sale of inventory to its customers. It also...
Koil Corporation generated $742,000 ordinary income from the sale of inventory to its customers. It also sold three noninventory assets during the year. Compute Koil’s taxable income assuming that: a.The first sale resulted in a $82,800 capital gain, the second sale resulted in a $16,900 capital loss, and the third sale resulted in a $27,900 capital loss. b.The first sale resulted in a $24,600 ordinary gain, the second sale resulted in a $42,750 capital gain, and the third sale resulted...
Koil Corporation generated $750,800 ordinary income from the sale of inventory to its customers. It also...
Koil Corporation generated $750,800 ordinary income from the sale of inventory to its customers. It also sold three noninventory assets during the year. Required: Compute Koil’s taxable income assuming that the first sale resulted in a $82,400 capital gain, the second sale resulted in a $21,100 capital loss, and the third sale resulted in a $24,300 capital loss. Compute Koil’s taxable income assuming that the first sale resulted in a $24,800 ordinary gain, the second sale resulted in a $45,000...
Zeno Inc. sold two capital assets in 2019. The first sale resulted in a $53,000 capital...
Zeno Inc. sold two capital assets in 2019. The first sale resulted in a $53,000 capital loss, and the second sale resulted in a $25,600 capital gain. Zeno was incorporated in 2015, and its tax records provide the following information: 2015 2016 2017 2018 Ordinary income $443,000 $509,700 $810,300 $921,000 Net capital gain 22,000 0 4,120 13,600 Taxable income $465,000 $509,700 $814,420 $934,600 Compute Zeno’s tax refund from the carryback of its 2019 nondeductible capital loss. Assume Zeno's marginal tax...
Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income property (property which, if sold, results in ordinary income). Assume that all of the property is held for more than one year. a. XYZ Corporation owns land used as an employee parking lot. How is the parking lot classified for tax purposes? b. Montana Corporation owns land held as an investment. How is the land classified for tax purposes? c. John, a self-employed electrician,...
(2. Capital Gains and Losses. (Obj. 2) a. Distinguish between long-term capital gain and short-term capital gain for capital assets acquired January 10, 2017. b. If an individual has gains and losses from the sale of stocks and other investments, what form or schedule is used to support the capital gain or loss reported on Form 1040?
2 POINTS (6) Indicate whether each of the following assets are capital assets, Sec. 1231 assets, or ordinary income property (property which, if sold, results in ordinary income). Assume that all of the property is held for more than one year. a. XYZ Corporation owns land used as an employee parking lot. How is the parking lot classified for tax purposes? b. Montana Corporation owns land held as an investment. How is the land classified for tax purposes? c. John,...
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