During the year, Leak Construction Corp. distributed a crane used in its business to Q, who owns 100 percent of the stock. The crane was worth $10,000 and had a basis of $19,000. The corporation also distributed land worth $70,000, with a basis of $40,000. Leak will report
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During the year, Leak Construction Corp. distributed a crane used in its business to Q, who owns 100 percent of the stock. The crane was worth $10,000 and had a basis of $19,000. The corporation also distributed land worth $70,000, with a basis of $40,000. Leak will report
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- Yager Corporation purchased residential real estate several years ago for $245,000, of which $35,000 was allocated to the land and $210,000 was allocated to the building. Yager took straight-line MACRS deductions of $40,000 during the years it held the property. In the current year, Yager sells the property for $320,000, of which $85,000 is allocated to the land and $235,000 is allocated to the building. Requirement What are the amount and character of Yager's recognized gain or loss on the sale? Begin by computing the gain or loss on sale. Select the formula and then enter the amounts and compute the gain or loss on the sale for the land, building and for the total. Land Building Total Recognized gain Next, determine the character of the gain or loss on sale of the land and building. (Complete all input fields. For items with a 0 balance, make sure to enter a 0 in the appropriate cell.) Total Land Building Recognized gain or lossIn March of Year 2, Mason contributed the following two properties, which he acquired in February of Year 1, to Boston Corporation in exchange for additional Boston stock: (1) land having a $45,000 FMV and a $78,000 basis and (2) another property having an $81,000 FMV and a $77,000 adjusted basis. Boston' employees use the land as a parking lot until Boston sells it in March of Year 3 for $43,000. One month after the sale, in April of Year 3, Boston adopts a plan of liquidation. (Assume that the properties were contributed to Boston in a Sec. 351 transaction. Assume that the second property contributed by Mason was not land.) Read the requirements. (Enter all amounts, even losses, as a positive number.) Requirement c. How would your answer to Part b change if the land were not used in Boston' trade or business? If the land were not used in Boston' trade of business, Boston recognizes a gain/loss on the subsequent sale of land.Amos, Inc. puchased land for $55,000 cash. They also incurred commissions of $ 1,650, property taxes of $6,000, and title insurance of $500. The $6,000 in property taxes includes $4,000 in back taxes paid by Amos, Inc. on behalf of the seller and $ 2,000 due for the current year after the purchase date. Amos also paid a contractor $ 10,000 to tear down a dilapidated building on the property. The capitalized cos of the land is: A. $61, 150 B. $73, 150 C.$ 71, 150 D. $70,650
- Silver Company purchased a machine for use in the business. The purchase price was $55,000 and the related sales tax totaled $500. Sliver paid $1,000 to have the machine delivered to its factory and $2,000 to have it assembled. Over the five-year life of the machine, maintenance cost of $800 will be incurred annually. What is the capitalized cost of this asset? Manning Company purchased a factory for $120,000. The factory included land, a building, and equipment. The land contributes 40.8%, the building contributes 49.6%, and the equipment contributes 9.6% of the factory’s value. How much of the cost should be assigned to the building? On January 1, Year 1, the Starshina Company paid $25,000 for a photocopier with an estimated useful life of 4 years, and an estimated residual value of $5,000. The company uses the straight-line method. What is the amount of depreciation expense for Year 2?Ron, David, and Mary formed Widget, Inc. Ron and David each received 40% of the stock, and Mary received the remaining 20%. Ron contributed land with an FMV of $70,000 and an adjusted basis of $20,000. The corporation also assumed a $30,000 liability on the property. David contributed land with an FMV of $30,000 and an adjusted basis of $15,000. David also contributed $10,000 in cash. Mary received her stock for services rendered. She normally would bill $20,000 for these services. What is David's basis in the corporate stock received? a.$0 b.$10,000 c.$25,000 d.$40,000Rossy Investigations purchased land, paying $97,000 cash plus a $250,000 note payable. In Addition, Rossy Investigations paid delinquent property tax of $2,000, title insurance costing $1,000, and $5,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $440,000. It also paid $56,000 for a fence around the property, $18,000 for a sign near the entrance, and $8,000 for special lighting on the grounds. Determine the cost of the land, land improvements, and building. Land Land Improvements Building Account Purchase price Note payable Property tax Title insurance Remove building Construct building Fence Sign Lighting Totals Submit All Parts
- Rossy Investigations purchased land, paying $94,000 cash plus a $230,000 note payable. In Addition, Rossy Investigations paid delinquent property tax of $4,000, title insurance costing $5,000, and $4,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $440,000. It also paid $52,000 for a fence around the property, $19,000 for a sign near the entrance, and $5,000 for special lighting on the grounds. Determine the cost of the land, land improvements, and building. Account Land Land Improvements Purchase price Note payable Property tax Title insurance Remove building Construct building Fence Sign Lighting Totals BuildingDuring the current year, TLI Corporation sells a tract of land for $90,000. The sale is made to Sophie, TLI Corporation's sole shareholder. TLI Corporation originally purchased the land five years earlier for $121,000. Read the requirements. Requirement a. What is the amount of gain or loss that TLI Corporation will recognize on the sale during the current year? First, calculate the gain or loss realized and then calculate the gain or loss recognized in the current year. (For a gain or loss with a zero value, enter $0 and select N/A.) Amount Gain or loss Gain or loss realized Gain or loss recognized Requirements a. What is the amount of gain or loss that TLI Corporation will recognize on the sale during the current year? b. Assume that in the following year, Sophie sells the land for $111,000. What is the amount of gain or loss Sophie will recognize? What are the tax consequences to TLI Corporation upon the subsequent sale by Sophie? c. Assume that in the following year, Sophie sells…Ken sold a rental property for $608,000. He received $140,000 in the current year and $117,000 each year for the next four years. Of the sales price, $422,500 was allocated to the building, and the remaining $185,500 was allocated to the land. Ken purchased the property several years ago for $479,500. When he initially purchased the property, he allocated $337,500 of the purchase price to the building and $142,000 to the land. Ken has claimed $23,500 of depreciation deductions over the years against the building. Ken had no other sales of §1231 or capital assets in the current year. Required: a. For the year of the sale, determine Ken's recognized gain or loss. b. For the year of the sale, determine character of Ken's gain, and calculate Ken's tax due because of the sale (assuming his marginal ordinary tax rate is 32 percent). Required A Required B For the year of the sale, determine Ken's recognized gain or loss. Note: Round your final answers to the nearest whole dollar amount. Input…
- Milloy Furniture purchased land, paying $85,000 cash and signing a $310,000 note payable. In addition, Milloy paid delinquent property tax of $5,000, title insurance costing $1,500, and $7,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $600,000. It also paid $55,000 for a fence around the property, $19,000 for a sign near the entrance, and $4,000 for special lighting of the grounds. Read the requirements Requirement 1. Determine the cost of the land, land improvements, and building. The cost of the land is The total cost of the land improvements is The cost of the building is O Time Course Chat GB V 19:04 DELL Composition Book 80 sheets 9 3/4 in x 7 1/2 in 247 mm x 190 mm Manufactured for Staples, Inc. 500 staples 1702 USA Framinde in Brazil O2019 Stuples Inc, and is uffilaige COLLEGE BULEDTPW, a calendar year taxpayer, sold land with a $549,000 tax basis for $845,000 in February. The purchaser paid $84,500 cash at closing and gave TPW an interest-bearing note for the $760,500 remaining price. In August, TPW received a $60,825 payment from the purchaser consisting of a $38,025 principal payment and a $22,800 interest payment. In the first year after the year of sale, TPW received payments totaling $116,650 from the purchaser. The total consisted of $76,050 principal payments and $40,600 interest payments. Required: For the first year after the year of sale, compute the difference between TPW’s book and tax income resulting from the installment sale method. Is this difference favorable or unfavorable? Using a 21 percent tax rate, determine the effect of the difference on the deferred tax asset or liability generated in the year of sale.Lavallee Furniture purchased land, paying $75.000 cash and signing a $340,000 note payable. In addition, Lavallee paid delinquent property tax of $2,000, title insurance costing $4,500, and $3,000 to level the land and remove an unwanted building. The company then constructed an office building at a cost of $400,000. It also paid $48,000 for a fence around the property, $16,000 for a sign near the entrance, and $6,000 for special lighting of the grounds. Read the requirements Requirement 1. Determine the cost of the land, land improvements, and building. O Requirements The cost of the land is 1. Determine the cost of the land, land improvements, and building. 2. Which of these assets will Lavallee depreciate? Print Done