1. Snapz, LP was formed in 2012 and adopted a calendar tax year. Here is a sched
ID: 2437622 • Letter: 1
Question
1. Snapz, LP was formed in 2012 and adopted a calendar tax year. Here is a schedule of Snapz's net Section 1231 gains and (losses) reported on its tax returns through 2017.
In 2018, Snapz recognizes a $24,750 gain on the sale of business land. How is this gain characterized on Snapz's 2018 tax return (portion of the amount ordinary and capital)?
Ordinary Income __________________________________________
Capital Gain _____________________________________________ _______________________________________________________________________________
2. indicate the tax rate (if any) that would apply to a US individual:
"C" = Capital gain tax rate
"O" = Ordinary tax rate
"N" = No tax
____. Management fee income collected from running the operations of an apartment complex.
2012 2013 2014 2015 2016 2017 (2,000) 4,000 (12,250) (1,080) -0- 1,300Explanation / Answer
Preceding loss = $12,250
Excess of above 2 is $12,250
Gain up to loss id Ordinary income $12,250
Section 1231 gain ($24,750– $12,250) =$12,500
Answer: $12,250 Income and $12,500Section 1231 gain
2) Amounts borrowed from a bank and distributed to owners of a partnership - Ordinary tax rate
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Distributions designated as capital gain distributions paid to shareholders of REIT stock – Capital Gain Tax rate
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