3 Bob sold the following assets in the current year: 4 5 6 7 A piece of furniture purchased for $900 and sold for proceeds of $750 A car (for his personal use) originally purchased for $4,000 and sold for proceeds of $1,500 A gold chain with a cost of $800 was sold for proceeds of $1,500 8 Required: What is Bob's tax impact of the sale of assets? 9 10 11 Solution: 12 12 13 Calculation of Capital Gain: Furniture (PUP) Car (PUP) Gold Chain (LPP) 14 Proceeds of disposition 15 Adjusted cost base 16 POD (applying $1,000 rule) 17 ACB (applying $1,000 rule) 18 Capital Gain (Loss) 19 Inclusion rate 2222 23 20 Allowable capital loss 21 $ 24 25 26 ՄՌ $ $ Loss is denied Gain is subject to tax

3 Bob sold the following assets in the current year: 4 5 6 7 A piece of furniture purchased for $900 and sold for proceeds of $750 A car (for his personal use) originally purchased for $4,000 and sold for proceeds of $1,500 A gold chain with a cost of $800 was sold for proceeds of $1,500 8 Required: What is Bob's tax impact of the sale of assets? 9 10 11 Solution: 12 12 13 Calculation of Capital Gain: Furniture (PUP) Car (PUP) Gold Chain (LPP) 14 Proceeds of disposition 15 Adjusted cost base 16 POD (applying $1,000 rule) 17 ACB (applying $1,000 rule) 18 Capital Gain (Loss) 19 Inclusion rate 2222 23 20 Allowable capital loss 21 $ 24 25 26 ՄՌ $ $ Loss is denied Gain is subject to tax

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 18P

See similar textbooks

Similar questions

Nicky receives a car from Sam as a gift. Sam paid 48,000 for the car. He had used it for business purposes and had deducted 10,000 for depreciation up to the time he gave the car to Nicky. The fair market value of the car is 33,000. a. Assuming that Nicky uses the car for business purposes, what is her basis for depreciation? b. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 32,500. What is her recognized gain or loss? c. Assume that Nicky deducts depreciation of 6,500 and then sells the car for 20,000. What is her recognized gain or loss?
Susie purchased her primary residence on March 15, year 4, for 550,000. She sold it on October 15, year 7, for 240,000. What amount of loss from the sale is recognized on her year 7 income tax return? a. 0 b. 60,000 c. 250,000 d. 310,000
the purchase for tax purpo 6. Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total $170,000 50,000 20,000 $240,000 a. How much of the $240,000 purchase price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization? Annie develops a successful tax practice. She sells the practice to her friend Carol
Mike sold the following assets during the current year: Painting Stamp collection Car Antique desk O a $654 O b. $788 Sales price O c. $1,310 O d. $655 2,508 600 708 1,181 Cost 885 1,200 1,406 Which one of the following amounts represents his taxable capital gain, net of allowable capital losses, for tax purposes during the current year? 1,379
Owe ramsin is upgrading her factory equipment this year and sells her old equipment. The old equipment had an original basis of $2,000 but has since been fully depreciated. Ramsin sells the property for $1,500. What are the tax consequences for Ramsin on the sales? 1. $1,500 ordinary income 2. No effect 3. $500 ordinary loss 4. $1,500 capital gain
Derek purchases a small business from Art on August 30, 2022. He paid the following amounts for the business: Fixed assets Goodwill Covenant not to compete Total $256,600 51,320 64,150 $372,070 a. How much of the $372,070 purchase price is for Section 197 intangible assets? b. What amount can Derek deduct on his 2022 tax return as Section 197 intangible amortization? If required, round the final answer to the nearest dollar. Use months, not days, in your computations.
Mike sold the following personal use property during the current year: Painting Stamp collection Outboard motor Antique desk Sales Price Cost $2,500 $ 800 600 1,200 900 100 1,300 1,950 What is his taxable capital gain, net of allowable capital losses, for the current year? $625. $650. $325. $750. 13