Linda sold several properties during 2020. The relevant information is as follows Depreciation Allowed Sales Price...

 

Transcribed Image Text:

Linda sold several properties during 2020. The relevant information is as follows Depreciation Allowed Sales Price $40,000 $110,000 N/A 90,000 30,000 14,000 N/A 180,000 Holding Period Business Building.................. 5 years Business Land.........................5 years . Business Equipment................ 3 years Home owned and used.............. 3 years as principal residence for past 3 years Personal Auto......... 2 years Stock held for investment....... 6 months Stamp collection.....................6 years . 6 . . Asset Original Cost $120,000 60,000 40,000 140,000 10,000 8,000 400 N/A N/A N/A 4,400 6,000 7,000 Linda bought another home for $210,000 after selling her old home. She sold no other assets during the year and had no other Section 1231 transactions during the past five years. Determine both the amount and character of the gain or loss from each sale. Assuming that Linda's marginal tax rate on ordinary income is 35%, compute the recognized gain or loss, the character of such gain or loss, and the applicable tax rate for any gain for each transaction during 2020. Linda sold several properties during 2020. The relevant information is as follows Depreciation Allowed Sales Price $40,000 $110,000 N/A 90,000 30,000 14,000 N/A 180,000 Holding Period Business Building.................. 5 years Business Land.........................5 years . Business Equipment................ 3 years Home owned and used.............. 3 years as principal residence for past 3 years Personal Auto......... 2 years Stock held for investment....... 6 months Stamp collection.....................6 years . 6 . . Asset Original Cost $120,000 60,000 40,000 140,000 10,000 8,000 400 N/A N/A N/A 4,400 6,000 7,000 Linda bought another home for $210,000 after selling her old home. She sold no other assets during the year and had no other Section 1231 transactions during the past five years. Determine both the amount and character of the gain or loss from each sale. Assuming that Linda's marginal tax rate on ordinary income is 35%, compute the recognized gain or loss, the character of such gain or loss, and the applicable tax rate for any gain for each transaction during 2020.

Answer rating: 100% (QA)

Business Building Gain of 80000 character of gain is longterm capital gain tax rate is 15 Business L... View the full answer