Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 10QPD
To determine
Discuss the reason behind reporting the net Section 1231 loss as a separately stated item by
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
In year 0, Longworth Partnership purchased a machine for $58,250 to use in its business. In year 3, Longworth sold the
machine for $37,900. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by
$25,200. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
c. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are decreased to
$19,400?
Description
Amount
Total Gain/(Loss) Recognized
Character of Recognized Gain/(Loss):
Ordinary Gain/(Loss)
$1231 gain/(loss)
In year 0, Longworth Partnership purchased a machine for $58,250 to use in its business. In year 3, Longworth sold the
machine for $37,900. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by
$25,200. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
a. What are the amount and character of the gain or loss Longworth will recognize on the sale?
Description
Amount
Total Gain/(Loss) Recognized
Character of Recognized Gain/(Loss):
Ordinary Gain/(Loss)
$1231 gain/(loss)
In year 0, Longworth Partnership purchased a machine for $64,750 to use in its business. In year 3, Longworth sold the machine for $43,200. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $23,900. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
a. What is the amount and character of the gain or loss Longworth will recognize on the sale?
In year 0, Longworth Partnership purchased a machine for $64,750 to use in its business. In year 3, Longworth sold the machine for $43,200. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $23,900. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)
a. What is the amount and character of the gain or loss Longworth will recognize on the sale?
In year 0, Longworth Partnership purchased a machine for $64,750 to use in its business. In…
Chapter 10 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 10 - Can a sole proprietorship be described as a...Ch. 10 - Mrs. Liu owns a business as a sole proprietor....Ch. 10 - This year, Mr. Pitts sole proprietorship generated...Ch. 10 - This year, Firm Q, a cash basis taxpayer, remitted...Ch. 10 - Prob. 5QPDCh. 10 - Define the tax base for the self-employment tax....Ch. 10 - Prob. 7QPDCh. 10 - Prob. 8QPDCh. 10 - Prob. 9QPDCh. 10 - Prob. 10QPD
Ch. 10 - Prob. 11QPDCh. 10 - Prob. 12QPDCh. 10 - Prob. 13QPDCh. 10 - Prob. 14QPDCh. 10 - Prob. 2APCh. 10 - Prob. 3APCh. 10 - Prob. 4APCh. 10 - Colin, a self-employed consultant, uses a room of...Ch. 10 - Prob. 6APCh. 10 - Prob. 7APCh. 10 - For 2019, Ms. Deming earned wages totaling...Ch. 10 - Calculate the total Social Security and Medicare...Ch. 10 - Prob. 11APCh. 10 - Prob. 12APCh. 10 - Jane is a self-employed attorney. This year, her...Ch. 10 - Prob. 14APCh. 10 - Prob. 15APCh. 10 - Amit is a limited partner in Reynolds Partnership....Ch. 10 - Kari is a limited partner in Lizard Partnership....Ch. 10 - Rochelle is a limited partner in Megawatt...Ch. 10 - Prob. 19APCh. 10 - Prob. 20APCh. 10 - Prob. 21APCh. 10 - Prob. 23APCh. 10 - AV Inc. is a member of an LLC. This year, AV...Ch. 10 - Prob. 25APCh. 10 - Prob. 26APCh. 10 - Prob. 27APCh. 10 - Prob. 28APCh. 10 - Prob. 29APCh. 10 - Refer to the facts in the preceding problem. BLS...Ch. 10 - Refer to the facts in part (c) of the preceding...Ch. 10 - For each of the following situations, indicate...Ch. 10 - a. If Video Associates is a partnership, and her...Ch. 10 - Prob. 34APCh. 10 - Prob. 1IRPCh. 10 - Javier is a full-time employee of B Inc. and...Ch. 10 - Mr. and Mrs. Chou file a joint income tax return....Ch. 10 - Travis is a professional writer who maintains his...Ch. 10 - Prob. 5IRPCh. 10 - Prob. 6IRPCh. 10 - Prob. 7IRPCh. 10 - Prob. 8IRPCh. 10 - Prob. 9IRPCh. 10 - Paulas Schedule K-1 from an LLC reported a 12,000...Ch. 10 - Marcus, a cash basis individual, is a general...Ch. 10 - Prob. 12IRPCh. 10 - Mr. and Mrs. West are the only shareholders in WW,...Ch. 10 - Prob. 14IRPCh. 10 - Prob. 15IRPCh. 10 - Prob. 16IRPCh. 10 - Prob. 17IRPCh. 10 - Prob. 1RPCh. 10 - Prob. 2RPCh. 10 - Herold had been a calendar year S corporation...Ch. 10 - Prob. 4RPCh. 10 - Mr. and Mrs. Janus operate a restaurant business...Ch. 10 - Prob. 2TPCCh. 10 - Prob. 3TPCCh. 10 - Marla recently inherited 50,000 and is considering...
Knowledge Booster
Similar questions
- In year 0, Longworth Partnership purchased a machine for $44,500 to use in its business. In year 3, Longworth sold the machine for $38,400. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $31,100. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) a. What are the amount and character of the gain or loss Longworth will recognize on the sale? Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) §1231 gain/(loss) b. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $68,000? Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) §1231 gain/(loss) c. What are the amount and character of the gain or loss Longworth will recognize on the sale…arrow_forwardIn year 0, Longworth Partnership purchased a machine for $57,250 to use in its business. In year 3, Longworth sold the machine for $44,300. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $24,900. Note: Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable. a. What are the amount and character of the gain or loss Longworth will recognize on the sale? Description Total Gain or (Loss) Recognized Character of Recognized Gain or (Loss): Ordinary Gain or (Loss) $1231 gain or (loss) Amountarrow_forwardIn year 0, Longworth Partnership purchased a machine for $57,500 to use in its business. In year 3, Longworth sold the machine for $38,800. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $27,300. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) b. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $70,000? Please don't provide answer in image format thank youarrow_forward
- In year 0, Longworth Partnership purchased a machine for $56,000 to use in its business. In year 3, Longworth sold the machine for $36,700. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $29,800. Note: Loss amounts should be indicated by a minus sign. Leave no answers blank. Enter zero if applicable. b. What are the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $61,250? Description Total Gain or (Loss) Recognized Character of Recognized Gain or (Loss) Ordinary Gain or (Loss) $1231 gain or (loss) Amountarrow_forwardIn year 0, Longworth Partnership purchased a machine for $54,500 to use in its business. In year 3, Longworth sold the machine for $36,000. Between the date of the purchase and the date of the sale, Longworth depreciated the machine by $26,700. (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) a. What is the amount and character of the gain or loss Longworth will recognize on the sale? b. What is the amount and character of the gain or loss Longworth will recognize on the sale if the sale proceeds are increased to $65,500?arrow_forwardNotes to the financial statements reveal the following information: 1. Gain on sale of a portion ofthe branded product line. In Year 10, Henry completed the sale of a portion of one of itsbranded product lines for $735 million. The transaction resulted in a pretax gain of $464.5million. The sale did not qualify as a discontinued operation. Henry did not disclose the taxeffect of the gain reported in Table above.REQUIREDa. Discuss whether you would adjust for each of the following items when using earnings toforecast the future profitability of Henry :1. Gain on sale of a portion of the branded product line.2. Extraordinary loss .b. Indicate the adjustment you would make to Henry’s net income for each item in Requirement(a)arrow_forward
- a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). b. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis).arrow_forwardBourne Guitars, a corporation, reported a $232,000 net §1231 gain for year 6. b. Assuming Bourne's nonrecaptured net §1231 losses from years 1-5 were $248,000, what amount of Bourne's net §1231 gain for year 6, if any, is treated as ordinary income? Bourne's gain treated as ordinary incomearrow_forwardGold Company, a calendar year taxpayer, sold two operating assets this year (each held for over a year). The first sale generated a $20,000 Section 1231 loss, and the second sale generated a $30,000 Section 1231 gain. As a result of these sales, Gold should recognize: Group of answer choices No gain or loss $10,000 gain treated as capital gain $10,000 ordinary income $20,000 ordinary loss and $30,000 gain treated as capital gainarrow_forward
- During 2019, Quill Corporation, a calendar year C corporation, sold the following business assets on the dates listed below. Compute the amount and character of the gain or loss Quill Corporation must report from the disposition of each asset. Then determine the sum of each type of gain or loss and the net effect these gains and losses have on Quill Corporation’s 2019 taxable income. Assume that Quill has no Section 1231 losses in prior years. Please show your work and explain your calculations. Asset Acquired Sold Cost CostRecovery AdjustedBasis Sales Price Computer 1/13/18 5/16/2019 $208,000 $74,880 $133,120 $180,000 Office equipment 8/10/15 3/10/2019 $160,000 $117,160 $42,840 $40,000 Office building 7/23/12 2/12/2019 $320,000 $60,000 $260,000 $400,000 Land 7/23/12 2/12/2019 $80,000 $0 $80,000 $100,000arrow_forwardX Corporation opted to deduct OSD. The following are the results of its operation: Net sales -P3,450,000; Cost of Sales – P2,100,000; Dividend from Y Corporation, a domestic corporation – P150,000; Gain on sale of Building – P200,000; Selling Expenses – P70,000; Administrative Expenses – P30,000. What is the taxable net income? A. P 930,000 B. P 1,020,000 C. P 870,000 D. P 810,000arrow_forwardGaston Corporation distributes § 1245 property as a dividend to its shareholders. The property's fair market value is $813,600, and the adjusted basis is $772,920. In addition, the amount of the recapture potential is $77,292. What is the amount and character of Gaston's gain or loss? As result of the distribution, Gaston recognizes ofarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT