7) Depreciation Recapture examples: a) Sec. 1250 gains; RE acquired in 2004 at a cost of $1 M; accumulated depreciation through date of sale is $400k; WHAT is the A.B. of the property? i. How do you treat the gain if the sales price is 1. $1.1 M 2. $900k ii. How do your answers change if the asset were held by a corporate taxpayer? HINT: Any other recapture rules apply? 1. $1.1 M 2. $900k b) Sec. 1245 gains i. Textile Corp sold machines A & B this year 1. A cost $180k and has A/D of $180k; sold at $40k 2. B cost $240k and has A/D of $240; sold at $260k 3. How much gain is recognized and what is its character а. А-- b. В-

7) Depreciation Recapture examples: a) Sec. 1250 gains; RE acquired in 2004 at a cost of $1 M; accumulated depreciation through date of sale is $400k; WHAT is the A.B. of the property? i. How do you treat the gain if the sales price is 1. $1.1 M 2. $900k ii. How do your answers change if the asset were held by a corporate taxpayer? HINT: Any other recapture rules apply? 1. $1.1 M 2. $900k b) Sec. 1245 gains i. Textile Corp sold machines A & B this year 1. A cost $180k and has A/D of $180k; sold at $40k 2. B cost $240k and has A/D of $240; sold at $260k 3. How much gain is recognized and what is its character а. А-- b. В-

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions

Section: Chapter Questions

Problem 13BCRQ

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