Consider the following two scenarios. The taxpayer sells the property acquired in April 2019 for $800,000...
Consider the following two scenarios. The taxpayer sells the property acquired in April 2019 for $800,000 (rental real estate, 27.5 year depreciation) on December 31, 2019 or December 31, 2020 for $1,000,000. Assume the taxpayer is in the 37 percent tax bracket.
Scenario 1. Sale on 12/31/19
Scenario 2. Sale on 12/31/20
1. What is the gain on sale? Show calculations.
2. What kind of gain is this? Ordinary, Capital, or Section 1231? Explain why for scenario 1 & 2
3. Based on your answers above, calculate the tax owed on the gain for scenario 1 & 2
Homework Answers
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Consider the following two scenarios. The taxpayer sells the
property acquired in April 2019 for $800,000...
Consider the following two scenarios. The taxpayer sells the property acquired in April 2019 for $800,000...
Consider the following two scenarios. The taxpayer sells the property acquired in April 2019 for $800,000 (rental real estate, 27.5 year depreciation) on December 31, 2019 or December 31, 2020 for $1,000,000. Assume the taxpayer is in the 37 percent tax bracket. Scenario 1. Sale on 12/31/19 Scenario 2. Sale on 12/31/20 1. What is the gain on sale? Show calculations. 2. What kind of gain is this? Ordinary, Capital, or Section 1231? Explain why 3. Based on your answers...
Consider the following two scenarios. The taxpayer sells the property acquired in April 2019 for $800,000...
Consider the following two scenarios. The taxpayer sells the property acquired in April 2019 for $800,000 (rental real estate, 27.5 year depreciation) on December 31, 2019 or December 31, 2020 for $1,000,000. Assume the taxpayer is in the 37 percent tax bracket. What is the gain on the sale? Show Calculations.
December 31, 2020 Consider the following two sommarios. The taxpayer sells the property acquired in April 201...
December 31, 2020 Consider the following two sommarios. The taxpayer sells the property acquired in April 2019 for $800.000 (rental real estate 275 or depreciation) on December 31, 2019 for $1.000.000. Assume the taxpayer is in the 37 percent tax bracket Scenario 1. Sale on 12/31/19 Scenario 2. Sale on 12/31/20 1. What is the pain on sale? Show calculations. Be sure to reference the solutions for Depreciations de 10/29 2. What kind of gain is this? Ordinary, Capital, or...
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December 31, 2020 Consider the following two sommarios. The taxpayer sells the property acquired in April 2019 for $800.000 (rental real estate 275 or depreciation) on December 31, 2019 for $1.000.000. Assume the taxpayer is in the 37 percent tax bracket Scenario 1. Sale on 12/31/19 Scenario 2. Sale on 12/31/20 1. What is the pain on sale? Show calculations. Be sure to reference the solutions for Depreciations de 10/29 2. What kind of gain is this? Ordinary, Capital, or...
10. (Tor F) The holding period describes the length of time that an asset is held. If the holding period is less than 12 months, a taxpayer cannot get a preferential capital gain tax rate. 11..(Tor F) When real estate property is acquired, a portion of the adjusted tax basis may be allocated to the value of the leasehold interests acquired. 12..(TorF) A Section 1031 exchange can be accomplished when the taxpayer acquires the new like kind property before selling...
In 2019, Jeff and Kim Jenson (married filing a joint return) have $250,000 of taxable income before considering the following transactions: a. On March 2, 2019, they sold a painting (art) for $100,000 that was inherited from Grandma on January 23, 2019. The FMV on the date of Grandma's death was $90,000 and Grandma's adjusted basis in the painting was $25,000; b. A $12,000 loss on 11/1/19 sale of bonds (acquired on 5/12/11); c. A $4,000 gain on 12/12/19 sale...
Goyo Industries (a sole proprietorship) sold three § 1231 assets during 2019. Data on these property dispositions are as follows: Asset Cost Acquired Depreciation Sold For Sold On Machine #1 Machine #2 Machine #3 $85,000 $30,000 $77,000 08/31/15 11/17/16 02/28/18 $32,000 $12,000 $28,000 $60,000 $15,000 $51,000 12/04/19 12/04/19 12/04/19 Determine the amount and the character of the recognized gain or loss from the disposition of each asset. If an amount is zero, enter "O". Character of Gain or Loss Total...
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