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A friend of yours wants to become a client and start a new company Cyberdyne Systems, specializing in AI research. In order to get seed money, she wants to sell a rental property she has owned for about 15 years. Below is the information derived from her tax returns, which she inherited from her uncle, who owned the home for many years before dying (50 Pts). • Cost of the House (in 1995) $200,000 • Value at time placed into service as rental property (2003): $250,000 • Depreciation taken on the house: $150,000 • Sales price of the house: $525,000 • Expenses of selling the home: $25,000 • Additional Assets for the home and their required information (All assets were put into service after the rental property was established and all items will go to the new owner): Purchase Price Accumulated MACRS Life Dep Asset Refrigerator $2500 $2000 5 Years Water Heater $700 $200 27.5 Years 5 years Stove New Bathroom $35,000 Improvement $1200 $1200 S12,000 27.5 Years Using the above questions, answer the questions below: What is the AR for the sale of the entire property? What is the AB for the entire property? Provide an allocation Excel for the AR and AB for each property and calculate the entire gain on the sale of this property into the following categories: • $1231 Gain • $1245 Gain • $1250 Gain A friend of yours wants to become a client and start a new company Cyberdyne Systems, specializing in AI research. In order to get seed money, she wants to sell a rental property she has owned for about 15 years. Below is the information derived from her tax returns, which she inherited from her uncle, who owned the home for many years before dying (50 Pts). • Cost of the House (in 1995) $200,000 • Value at time placed into service as rental property (2003): $250,000 • Depreciation taken on the house: $150,000 • Sales price of the house: $525,000 • Expenses of selling the home: $25,000 • Additional Assets for the home and their required information (All assets were put into service after the rental property was established and all items will go to the new owner): Purchase Price Accumulated MACRS Life Dep Asset Refrigerator $2500 $2000 5 Years Water Heater $700 $200 27.5 Years 5 years Stove New Bathroom $35,000 Improvement $1200 $1200 S12,000 27.5 Years Using the above questions, answer the questions below: What is the AR for the sale of the entire property? What is the AB for the entire property? Provide an allocation Excel for the AR and AB for each property and calculate the entire gain on the sale of this property into the following categories: • $1231 Gain • $1245 Gain • $1250 Gain
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ANSWER Solution Page 1 foom the data she has owned fox about 15 Years ealised Jain o8 l... View the full answer
Related Book For
College Accounting
ISBN: 978-1111528126
11th edition
Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille
Posted Date:
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