Buckley, an individual, began business two years ago and has never sold a §1231 asset. Buckley has owned each ofthe assets since he began the business. In the current year, Buckley sold the following business assets:Original CostAssetComputers$ 6,000MachineryFurnitureBuilding10,00020,000100,000AccumulatedDepreciation$ 2,0004,00012,00010,000Gain/Loss$ (3,000)(2,000)7,000(1,000)Assuming Buckley's marginal ordinary income tax rate is 32 percent, answer the questions for the following alternativescenarios:b1. Assume that the amount realized increased so that the building was sold at a $6,000 gain instead. What is the amount andcharacter of Buckley's gains or losses for the current year?b2. Calculate Buckley's tax liability or tax savings for the year.Complete this question by entering your answers in the tabs below.Req b1Req b2Assume that the amount realized increased so that the building was sold at a $6,000 gain instead. What is the amount andcharacter of Buckley's gains or losses for the current year?DescriptionAmount§1245 gain$7,000§1231 loss$6,000

b2.To calculate Buckley's tax liability or tax savings for the year, we need to determine the tax on…

Answered: Buckley, an individual, began business…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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3. In year 0, Canon purchased a machine to use in its business for $56,000. In year 3, Canon sold the machine for $42,000. Between the date of the purchase and the date of the sale, Canon depreciated the machine by $32,000. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) b. What are the amount and character of the gain or loss Canon will recognize on the sale, assuming that it is a corporation? Total Gain/Loss Recognized? Ordinary Gain/Loss? 1231 Gain/Loss?
Munabhai
Baker Corporation owned a building located in Kansas. Baker used the building for its business operations. Last year, a tornado hit the property and completely destroyed it. This year, Baker received an insurance settlement. Baker had originally purchased the building for $350,000 and had claimed a total of $100,000 of depreciation deductions against the property. What are Baker's realized and recognized gain or (loss) on this transaction and what is its basis in the new building in the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) d. Baker received $450,000 in insurance proceeds and spent $450,000 rebuilding the building during the next three years. Description Amount Basis of replacement property
On May 31, 2022, Javier Sanchez purchased and placed in service a new 7-year class asset costing $470,000 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2022, his business generated a net income of $564,000 before any § 179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2022 and 2023. Total cost recovery deduction in 2022: Total cost recovery deduction in 2023: $
s
Q sold its warehouse for $500,000 (land $250,000; building $250,000) in the current year and purchased a larger warehouse for $550,000 (land $300,000; building $250,000). The original warehouse cost $350,000 (land $100,000; building $150,000) and was the only asset in Class 1 which had an undepreciated capital cost balance of $80,000 before the sale. Q Inc. elected to put the new warehouse into a separate Class 1 to take advantage of the 6% CCA rate. What is the minimum amount is to be reported in net income for tax purposes for the current year?
Joe's Restaurant Inc. purchased an oven for $10,000 and takes $9,000 of depreciation on that oven over three years. Under IRC §1011 the basis of the oven is $1,000. A sells the oven for $20,000 thereby realizing a gain of $19,000. How much of the gain is recaptured as ordinary income, and how much is treated as §1231 gain . a. 9,000 recaptured as ordinary income 10,000 treated as §1231 gain b. 10,000 recaptured as ordinary income 9,000 treated as §1231 gain c. 19,000 recaptured as ordinary income none treated as §1231 gain d. none recaptured as ordinary income 19,000 treated as §1231 gain
Cayden Purchased the following for his rental real estate business: An apartment building; he paid $103,500 for the building ( not including the value of the land). Furniture for $8,649. Pickup truck for $27,500, used for 75% business. What is Cayden's total unadjusted basis immediately after acquisition (UBIA) of these assets? 1) $29,274 2) $112,149 3) $132,774 4) $139,649
rlock Tutor TutorMe) Ewing Corporation sold an office building that it used in its business for $879,381. Ewing bought the building ten years ago for $779,550 and has claimed $523,412 of depreciation expense. What is the amount of the $1231 capital gain for Ewing Corporation?
A3
On January 20, 2022, Javier Sanchez purchased and placed in service a new 7-year class asset costing $419,600 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC). Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2022, his business generated a net income of $503,520 before any § 179 immediate expense election. If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem. a. Determine the cost recovery deductions (including first-year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2022 and 2023. Total cost recovery deduction in 2022: $ 31,381 Total cost recovery deduction in 2023: $ 53,780 b. Complete Javier's Form 4562 (page 1) for 2022. Note: For 2022, the maximum § 179 is…

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