Question

Saved Required information Problem 3-54 (LO 3-5) The following information applies to the questions displayed below. of Hans runs a sole proprietorship. Hans has reported the following net 51231 gains and losses since he began business. Net 51231 gains shown are before the look back rule. (Leave no answer blank. Enter zero if applicable.) Net 51231 Gains/Losses) $ (65,000) 15,000 Year 3 10,000 Years Year 6 Year 7 (current year) 50,000 Problem 3-54 Part-a a. What amount, if any, of the year 7 (current year) $50,000 net $1231 gain is treated as ordinary income?

a)What amount, if any, of the year 7 (current year) $50,000 net 1231 gain is treated as ordinary income?

b) Assume that the $50,000 net 1231 gain occurs in year 6 instead of year 7. What amount of the gain would be treated as ordinary income in year 6?

Answer 1

Recoptuoed/ nondecaptroed 8 123 0sses year net$1231 Notes Ordiaay LTCG gaoCloss) loss Ps codfhaoy (110000) NonTecaptord Yeao C$65,000) $0 C$65,0) 1OSses $15000 Gaf P oodfhorsy $1500 ($ 50,000) nnecoptrofd losses $15,000 yea03 $0 ($ 50,000) Noneophoed losses Non Tecaptored loses $0 ($ 50,000) $10.000 Gan Ps oodfraov ($ uoc00) nonaecaphwoed loSės $0 | NonTecaphsoed Yeads $10.000 $10,000 Yeara6 $0 $0 tossesoly Caoy yea07 $ S0.000 $50000 PS $30000 $0 61231 b. AAes apply Png the S 1231 5 yearo loak back ule, $uoc00 A odfnaoy income e poo00 Ps longteom Captal Ner S 1231 gain Closs) Rocophooed/ ron becaptured S 1231 bese $0 Notes oodiraoy LTCG yero1 ($65000) ($65,000) nonccoptuoed losse ($65,000) yea02 $ 15,000 $ 15.000 Gabn s oodinaroy (E S0,000) onaptoed losSeS NonDEcaptuoed $15,000 $0 ($50,000) losses yearou $0 $0 (40,000) Norecaptuoed losses pl0,000 $10000 Gain Ps ootiroo yeao5 $10000 ($uo000) Nonocaptooed, losses Galn 8 odmaoy $40000 $ 10000 $0 శ్రీ కా $U0.000 5 1231 Non Tecaptored (osses only Carooy Focuand 5 yearrs