$4,000 galn . 30 a. S3000 gain b. $3500 gain c. and Joan received cash of $50,00
ID: 382344 • Letter: #
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$4,000 galn . 30 a. S3000 gain b. $3500 gain c. and Joan received cash of $50,000. The following additional information pertains to this transaction: $500,000 300,000 9. In Year 9, Joan Reed exchanged commercial real estate that she owned for other commercial real estate Fair value Adjusted basis Fair value 450,000 What amiount of gain should be recognized in Reed's Year 9 income tax return? a. $200,000 b. $100,000 c. $50,000 d. $0 condemnation award of $220,000. Manuel's adjusted basis in the building was $120,000. Manuel reinvests in similar property costing $200,000, and Manuel makes the proper election regarding the property. Manuel's basis in the new building is A) $102,400. B) $121,400. C)$120,000. D) $200,000. lding used in Manuel's business was condemned by the city of Mobile. Manuel received a 11.On January 2, Year X1, Bates Corp. purchased and placed into service 7-year MACRS tangible property costing $100,000. On December 31, Year X3, Bates sold the property for $82,000, after having taken $46,525 in MACRS depreciation deductions. What amount of the gain should Bates recapture as ordinary income? a. $0 b. $28,525 c. $46,525 d. $60,525 12.An individual had AGI of $100,000 for the current year, before considering the following: Long-term capital gain of Short-term capital loss of Loss from sale of business auto (owned 2 years) $3.000 9,000) 000) What is her adjusted gross income for the current year? a. $95,000 b. 96,000 c. S97,000 d. $93,000 e. $94,000 13.Barbara had these net Section 1231 gains and losses: Section 123 Year 1 Year 2 Year 3 Year 4 ,000) $45,000 $20,000 S15,000 in (loss) How will Barbara treat the $15,000 gain in year 4? Ordinary Income $5,000 Capital Gain $10,000 $5,000 -Ordinary Income-CapitalGain_ al. b. SO 15,000 $15,000 $o $10,000 d. 14. Which statement is correct? A) Tax credits reduce tax liability on a dollar-for-dollar basis. B) Tax deductions reduce tax liability on a dollar-for-dollar basis. C) The benefit of a tax credit depends on the taxpayer's marginal tax rate.Explanation / Answer
9) a. $200,000
Fair Price of the new asset + Cash received - Adjusted price of the asset = 450,000 + 50,000 - 300,000 = $200,000
10) It wil bw the initial basis itself
c. $120,000
11)Gain up to the depreciation deduction should be considered as ordinary income and will be taxed accordingly
b. $ 28,525
Selling price of asset - ( book value of asset - depreciation ) = gain from asset sales
12) Initial AGI + long-term capital gain - short-term capital loss = 100,000 + 3000 - 9000 = $ 94,000
e. $ 94,000
13)Section 1231 gains are considered as ordinary income
d. $ 15,000 as ordinary income
14) A is correct
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