1) Michael sells Sec. 1231 property this year, resulting in a $4,000 gain. This is the...
1) Michael sells Sec. 1231 property this year, resulting in a $4,000 gain. This is the first time he has disposed of any Sec. 1231 property. Michael’s tax rate is 10%. His tax on the Sec. 1231 gain will be
A) $0.
B) $400.
C) $600.
D) $1,120
2.
During the current year, LaVone recognizes a $30,000 Sec. 1231 gain on sale of land and a $18,000 Sec. 1231 loss on the sale of land. Prior to this, LaVone's only Sec. 1231 item was a $14,000 loss six years ago. LaVone must report a
A) $12,000 net LTCG.
B) $12,000 ordinary income.
C) $14,000 ordinary income.
D) $10,000 ordinary income and $2,000 net LTCG.
Homework Answers
Answer:1
Option (A) $0
Because at 10% income will be upto $9525 and capital gain is exempt upto $38,600 including regular income.
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1) Michael sells Sec. 1231 property this year, resulting in a
$4,000 gain. This is the...
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