6 Firefox File Edit View History Bookmarks Tools Window Help L21 13 1 29%Elr Sun12246 PM Q 0 EE O O 6 O BookerlMindL M Reset Passwort w Reset Passwor' Q Popl - Digital B 8 Colorado State (9 McGraw-Hill ct m Questionl , X H .Compute Mr G is accumukuat: + v 6 C Q 0 15 FE https://ezto.mheducation.com/ext/map/index.htm|[con=con&exlernaLbrowser:0&launchUrl=http -= if? 8 '1' III\\ 3 Ex 2] 5 Module 4: Critical Thinking 8 Saved Help Save 8. Exit Submit w 1 [T he following information applies to the questions displayed below. ] WAR (We Are Rich) has been in business since 1988. WAR is an accrual-method sole proprietorship that deals in the manufacturing and wholesaling of various types of golf equipment. Hack & Hack CPAs has filed accurate tax returns for Part 1 of3 WAR's owner since WAR opened its doors. The managing partner of Hack & Hack (Jack) has gotten along very well with the owner of WARMr. Someday Woods (single). However, in early 2021, Jack Hack and Someday Woods played a round of golf, and Jack, for the first time ever, beat Mr. Woods. Mr. Woods was so upset that he fired Hack & Hack and has hired you to compute his 2021 taxable income. Mr. Woods was able to provide you with the following information from prior tax 10_ returns. The taxable income numbers reflect the results from all of Mr. Woods's activities except for the items separately Wm\" stated. You will need to consider how to handle the separately stated items for tax purposes. Also, note that the 20162020 numbers do not reflect capital loss carryovers. EBk 2016 2017 2018 2019 2020 References Ordinary taxable income is 4,340 $ 2,170 $ 97,995 $ 177,225 $ 260,625 other items not included in ordinary taxable income: Net gain (loss) on disposition of 1231 assets $ 3,510 10,850 $ (7,020) Net longterm capital gain (loss) on disposition of capital assets :11 (16,275) $ 1,170 $ (18,400) $ (8,700) In 2021, Mr. Woods had taxable income in the amount of $514,000 before considering the following events and transactions that transpired in 2021: a. 0n Januaw 1, 2021, WAR purchased a plot of land for $108,500 with the intention of creating a driving range where patrons could test their new golf equipment. WAR never got around to building the driving range; instead. WAR sold the land on October 1, 2021, for $43,400. b. On August 17, 2021, WAR sold its golftesting machine, \"Iron Byron," and replaced it with a new machine, \"Iron Tiger.\" \"Iron Byron" was purchased and installed for a total cost of $25,400 on February 5, 2017. At the time of sale, \"Iron Byron\" had an adjusted tax basis of $7,400. WAR sold \"Iron Byron" for $33,500. c. In the months October through December 2021, WAR sold various assets to come up with the funds necessary to invest in WAR's latest and greatest inventionthe three-dimple golf ball. Data on these assets are provided below: Firefox File Edit View History Bookmarks Tools Window Help 29% Sun 12:46 PM QE Booker | Mindbo M Reset Password popl Reset Password (pup) Popl - Digital Bus Colorado State U McGraw-Hill Con M Question 1 - NX . Compute Mr. W G is accumukuated + 0 8 . https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https _ & Module 4: Critical Thinking i Saved Help Save & Exit Submit Check my work Placed in Service (or Initial Accumulated Selling Asset purchased) Sold Basis Depreciation Price Someday's black leather sofa (used in office) 4/4/20 10/16/21 $ 3, 680 $ 710 $ 3, 410 Part 1 of 3 Someday's office chair 3/1/19 11/8/21 9, 360 3, 340 4, 850 Marketable securities 2/1/18 12/1/21 14, 040 0 21, 700 Land held for investment 7/1/20 11/29/21 53, 500 55, 650 Other investment property 11/30/19 10/15/21 18, 500 14, 800 10 points d. Finally, on May 7, 2021, WAR decided to sell the building where it tested its plutonium shaft, lignite head drivers. WAR purchased the building on January 5, 2009, for $232,500 ($204,000 for the building, $28,500 for the land). At the Book time of the sale, the accumulated depreciation on the building was $58,500. WAR sold the building (with the land) for References $351,000. The fair market value of the land at the time of sale was $53,500. (Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Loss amounts should be indicated by a minus sign.) Comprehensive Problem 11-73 Part 1 (Algo) Compute Mr. Woods's taxable income after taking into account the transactions described above. Depreciation Ordinary Short Description Gain/(Loss) Recapture $1231 Long Term LT 28% LT 25% LT 0/15/20% income/(Loss) Term Total a. Land b. Iron Byron c1. Sofa Mc Graw Prev 1 2 3 of 3 Next > Hill 020-0...50.35 PM 2020-0... ... 9 .... tvFirefox File Edit View History Bookmarks Tools Window Help 1 29% Sun 12:46 PM QE Booker | Mindbo M Reset Password popl Reset Password (pup) Popl - Digital Bus Colorado State U McGraw-Hill Con M Question 1 - NX . Compute Mr. V G is accumukuated + 0 8 . https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https' _] & Module 4: Critical Thinking i Saved Help Save & Exit Submit Check my work Required information Compute Mr. Woods's taxable income after taking into account the transactions described above. Part 1 of 3 Description Gain/(Loss) LT 0/15/20% 10 a. Land points b. Iron Byron c1. Sofa c2. Chai Book c3. Marketable securities References c4. Land - for investment c5. Investment property d1. Building d2. Land 0 0 0 0 0 0 0 $1231 netting Step 1 - depreciation recapture - ordinary income Step 2 - $1231 G/L netting gains/losses exclusive of $1250 - Unrecap $1250 Step 3 - lookba - apply to unrecap $1250 first Mc Graw Hill 020-0...50.35 PM 2020-0... 9 . ... stvFirefox File Edit View History Bookmarks Tools Window Help 1 29% Sun 12:46 PM QE Booker | Mindbo M Reset Password popl Reset Password pixel Popl - Digital Bus Colorado State U McGraw-Hill Con M Question 1 - NX . Compute Mr. V G is accumukuated + 0 8 . https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https' _] & Module 4: Critical Thinking i Saved Help Save & Exit Submit Check my work 0 ! Required information Step 1 - depreciation recapture Part 1 of 3 ordinary income Step 2 - $1231 G/L netting gains/losses exclusive of $1250 10 points Unrecap $1250 Step 3 - lookback rule Book - apply to unrecap $1250 first Ordinary income References Remaining unrecap $1250 Remaining gain - 0/15/20 0 0 0 0 0 0 0 Capital gain netting: Long term capital loss carryover Reclassified 0 0 Mc Graw Hill 020-0...50.35 PM 2020-0... 9 .... tvFirefox File Edit View History Bookmarks Tools Window Help 1 29% Sun 12:46 PM QE Booker | Mindbo M Reset Password popl Reset Password (pop) Popl - Digital Bus Colorado State U McGraw-Hill Con M Question 1 - NX . Compute Mr. V G is accumukuated + O & .9 https://ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https' _ & Module 4: Critical Thinking i Saved Help Save & Exit Submit Check my work ! Required information Part 1 of 3 Capital gain netting: Long term capital loss carryover 10 Reclassified points 0 0 0 Book References Taxable Income: Before transactions Ordinary income/loss LTCG @ 25% LTCG @ 0/15/20% Taxable income $ 1 : Mc Graw Hill 020-0...50.35 PM 2020-0.. ... 9 .... tv