Sissie owns two items of business equipment. They were both purchased in 2010 for $100,000, both have a seven-year recovery period, and both have an adjusted basis of $37,490. Sissie is considering selling these assets in 2014. One of them is worth $60,000, and the other is worth $23,000. Because both items were used in her business, Sissie simply assumes that the loss on one will be offset against the gain from the other and that the net gain or loss will increase or reduce her business income. Is she correct? Explain.
Answer to relevant QuestionsHarold, a CPA, has a new client who recently moved to town. Harold prepares the client's current-year tax return, which shows a net § 1231 gain. Harold calls the client to request copies of the returns for the preceding ...Larry is the sole proprietor of a trampoline shop. During 2014, the following transactions occurred. • Unimproved land adjacent to the store was condemned by the city on February 1. The condemnation proceeds were $15,000. ...Eagle Partners meets all of the requirements of § 1237 (subdivided realty). In 2014, Eagle Partners begins selling lots and sells four separate lots to four different purchasers. Eagle Partners also sells two contiguous ...Sam and Elizabeth Jefferson file a joint return and have three children-all of whom qualify as dependents. If the Jeffersons have AGI of $327,000, what is their allow able deduction for personal and dependency exemptions for ...Roy and Brandi are engaged and plan to get married. During 2014, Roy is a full-time student and earns $9,000 from a part-time job. With this income, student loans, savings, and nontaxable scholarships, he is self-supporting. ...
Post your question