During the current year L sold his business and received $440,000 for its related franchise. The franchise had an original cost of $320,000 and the Class 14 UCC at the beginning of the current was $220,000. What is the total amount that is included in L’s net income for tax purposes in the current year with respect to the sale of the franchise? **wrong answers will get 10 dislikes, need a genuine and correct answer. do not copy from others

During the current year L sold his business and received $440,000 for its related franchise. The franchise had an original cost of $320,000 and the Class 14 UCC at the beginning of the current was $220,000. What is the total amount that is included in L’s net income for tax purposes in the current year with respect to the sale of the franchise? **wrong answers will get 10 dislikes, need a genuine and correct answer. do not copy from others

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter18: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 42P

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Michael owns a rental house that generated a 10,000 loss this year. Michael manages the rental property but does not meet the standards for material participation. Michael is a college professor and has wages of 60,000 and 5,000 in dividend income. How is the 10,000 rental real estate loss treated on Michaels tax return? a. 5,000 of the loss is deductible against the passive dividend income. b. The rental loss is not deductible because Michael does not have any passive income. c. 10,000 loss is not deductible because Michael does not materially participate in the rental activity. d. 10,000 loss is deductible under the rental real estate exception because Michael actively participates in the rental activity.
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