This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Marketable securities This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis Accumulated Depreciation* Sale Price Marketable securities $144,000 $0 $64,000 Production equipment 93,000 76,000 30,000 Business realty: Land 165,000 0 180,000 Building 200,000 58,300 210,000 *Through date of sale. Required: Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Recompute taxable income assuming that Sigma sold the securities for $150,000 rather than $64,000.

This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Marketable securities This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis Accumulated Depreciation* Sale Price Marketable securities $144,000 $0 $64,000 Production equipment 93,000 76,000 30,000 Business realty: Land 165,000 0 180,000 Building 200,000 58,300 210,000 *Through date of sale. Required: Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. Recompute taxable income assuming that Sigma sold the securities for $150,000 rather than $64,000.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter18: Comparative Forms Of Doing Business

Section: Chapter Questions

Problem 18P

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This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months:

Marketable securities
This year, Sigma, Incorporated generated $612,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months:
	Initial Basis	Accumulated Depreciation*	Sale Price
Marketable securities	$144,000	$0	$64,000
Production equipment	93,000	76,000	30,000
Business realty:
Land	165,000	0	180,000
Building	200,000	58,300	210,000
*Through date of sale.
Required:
Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.
Recompute taxable income assuming that Sigma sold the securities for $150,000 rather than $64,000.