20. What are the highest tax rates for each of the following income types: ____.
ID: 2437521 • Letter: 2
Question
20. What are the highest tax rates for each of the following income types:
____. ECI earned by a foreign corporation
____. FDAP earned by a foreign corporation
____. Ordinary income earned by an U.S. individual
____. Ordinary income earned by a U.S. corporation
21. Gold, LP sold a commercial office building used in its business for $500,000. Gold, LP purchased the building in 1991 for a cost of $500,000 and had deducted $200,000 in Section 1250 depreciation through date of sale. Gold should characterize the $200,000 gain recognized on sale as:
A. $400,000 unrecaptured Section 1250 gain and $200,000 Section 1231 loss.
B. $200,000 unrecaptured Section 1250 gain.
C. $200,000 Section 1231 gain.
D. $200,000 Ordinary gain.
E. None of the above.
Explanation / Answer
22.
ECI earned by a foreign corporation - 54.5% or higher
FDAP earned by a foreign corporation - 30%
Ordinary income earned by an U.S. individual - 37%
Ordinary income earned by a U.S. corporation - 35 %
21. Answer is option B $200,000 unrecaptured Section 1250 gain.
Book value = 500000-200000 =300000
Selling price = 500000
Gain on sale = 500000-300000 = 200000
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