Amelia's business goes bankrupt in 2020. To close her business, Amelia starts by selling off her...

 

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Amelia's business goes bankrupt in 2020. To close her business, Amelia starts by selling off her business assets. Below are the asset disposition transactions: Purchased Date 5/1/22 3/20/20 Equipment 4/1/20 1/1/21 Assets Delivery car Furniture Land Cost 30k 40k 110k 150k Sold date 12/31/22 12/31/22 12/31/22 12/31/22 Sold price 25k 20k 100k 180k Assume there is no Section 179 and bonus depreciation. Use MACRS only for depreciation. Show detailed calculation and explanation I a) Calculate total accumulated depreciation of each asset until the sold date (12/31/22). Hint: Review Class 15 material. In the year of disposition, under half-year convention, only % of MACRS normal rate is allowed. b) Calculate the adjusted basis for each asset c) Calculate the gain/loss for each asset d) Point out the exact character of gain/loss for each asset gain/loss (ex: Ordinary, pure 1231, 1245, 1250, etc.) e) Calculate the Net 1231 Gain/Loss Hint: Be aware of 1245 Depreciation recapture and 1231 lookback rules Amelia's business goes bankrupt in 2020. To close her business, Amelia starts by selling off her business assets. Below are the asset disposition transactions: Purchased Date 5/1/22 3/20/20 Equipment 4/1/20 1/1/21 Assets Delivery car Furniture Land Cost 30k 40k 110k 150k Sold date 12/31/22 12/31/22 12/31/22 12/31/22 Sold price 25k 20k 100k 180k Assume there is no Section 179 and bonus depreciation. Use MACRS only for depreciation. Show detailed calculation and explanation I a) Calculate total accumulated depreciation of each asset until the sold date (12/31/22). Hint: Review Class 15 material. In the year of disposition, under half-year convention, only % of MACRS normal rate is allowed. b) Calculate the adjusted basis for each asset c) Calculate the gain/loss for each asset d) Point out the exact character of gain/loss for each asset gain/loss (ex: Ordinary, pure 1231, 1245, 1250, etc.) e) Calculate the Net 1231 Gain/Loss Hint: Be aware of 1245 Depreciation recapture and 1231 lookback rules

Answer rating: 100% (QA)

a Delivery Car The Delivery Car was purchased on 5122 and sold on 32020 This means that the car was held for less than a year so the halfyear convention applies This means that for the year of disposi... View the full answer