Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2021, for $850,000. What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship? a. If Heron is a C corporation, what is the amount of each type of gain recognized? If an amount is zero, enter "0". Round your answers to the nearest dollar. Character of Gain Ordinary income under § 1245 Ordinary income under § 1250 Ordinary income under 5 291 § 1231 gain Total recognized gain 0000 b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized? Character of Gain Ordinary income under 5 1245 Ordinary income under 5 1250 Ordinary income under 5 291 51231 gain Total recognized gain 10000

Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2021, for $850,000. What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship? a. If Heron is a C corporation, what is the amount of each type of gain recognized? If an amount is zero, enter "0". Round your answers to the nearest dollar. Character of Gain Ordinary income under § 1245 Ordinary income under § 1250 Ordinary income under 5 291 § 1231 gain Total recognized gain 0000 b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized? Character of Gain Ordinary income under 5 1245 Ordinary income under 5 1250 Ordinary income under 5 291 51231 gain Total recognized gain 10000

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter4: Corporations: Organization And Capital Structure

Section: Chapter Questions

Problem 43P

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Heron Company purchases commercial realty on November 13, 2002, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2020, for $850,000. What are the tax consequences of the sale of realty if Heron is: A C corporation?
Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2021, for $850,000. What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship? a. If Heron is a C corporation, what is the amount of each type of gain recognized? If an amount is zero, enter "0". Round your answers to the nearest dollar. Character of Gain Ordinary income under § 1245 Ordinary income under § 1250 Ordinary income under § 291. § 1231 gain Total recognized gain 287,492 X § 1231 gain Total recognized gain 0 57,498 429,994 487,492 b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized? Character of Gain Ordinary income under § 1245 Ordinary income under 5 1250 Ordinary income under § 291 0 0 0 487,492 487,492 ✓
3. Jake purchased a $235,000 crane for his construction business. He sold the crane for $175,000 after taking $115,000 of depreciation. Assume Jake is a. On what form would the gain or loss originally be reported? b. What is the amount of gain or loss on the sale? c. What amount of the gain or loss is subject to ordinary tax rates?
Firm P, a noncorporate taxpayer, purchased residential realty in 1985 for $1,000,000. This year it sold the realty for $450,000. Through date of sale, Firm P deducted $814,000 accelerated depreciation on the realty. Straight-line depreciation would have been $625,000. Required: Determine the amount and character of Firm P's recognized gain on sale. How would your answer change if Firm P was a corporation? Using template: 1. Realized and recognized gain 2. Ordinary income 3. Section 1231 gain
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