On January 1, 2011, Sam Johnson acquired depreciable real property for $50,000. He used straight-line depreciation on this asset. He sold the property for $96,000 on January 3, 2020, when its adjusted basis was $38,000. Sam had never had a 1231 loss until 2019 when he had $30,000 of 1231 loss. What are the amounts, and character (nature) of the gain or loss if the real property was residential rental property? Include in the “character” the tax rate category, for example if you classify some of the gain as “1250 recaptured gain” list it as “1250 recaptured gain taxed at ordinary rates” Or if you characterize some of the gain as “28% LTCG from collectibles”, list it as “28% gain taxed at the lower of ordinary rates or 28%”.
On January 1, 2011, Sam Johnson acquired
What are the amounts, and character (nature) of the gain or loss if the real property was residential rental property? Include in the “character” the tax rate category, for example if you classify some of the gain as “1250 recaptured gain” list it as “1250 recaptured gain taxed at ordinary rates” Or if you characterize some of the gain as “28% LTCG from collectibles”, list it as “28% gain taxed at the lower of ordinary rates or 28%”.
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