Chap12%20HW%20Solutions

Chap12%20HW%20Solutions - 200 CCH Federal Taxation-Basic...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
200 CCH Federal Taxation—Basic Principles $360,000), which is multiplied by 100 percent to get the amount recaptured as ordinary income. The remaining gain is Section 1231 gain under 1987 law. c. In the case of an apartment building, there is $111,200 recaptured as ordinary income and the remaining $168,800 is Section 1231 gain. The excess depreciation of $20,000 ($50,000 1 $30,000) for the year 1975 is multiplied by 56 percent (200 1 144 months held) to get $11,200. The excess depreciation of $100,000 ($430,000 1 $330,000) is multiplied by 100 percent to get $100,000, or a total of $111,200 of ordinary income for the two time periods. The remaining $168,800 is Section 1231 gain under 1987 law. 2. a. In the case of a factory building depreciated under an accelerated ACRS method, there is recapture as ordinary income to the extent of total depreciation taken, but not to exceed recognized gain. In this case, all of the $280,000 recognized gain is ordinary income. b. In the case of an apartment building, there is ordinary income recapture to the extent of the excess depreciation of $120,000 ($480,000 1 $360,000) and the remaining $160,000 depreciation is recaptured as income taxed at a maximum rate of 25 percent. ANSWERS TO QUESTIONS—CHAPTER 12 Topical List of Questions 1. Capital Assets: Definition (¶12,025) 2. Capital Assets: Sale of Business (¶12,115) 3. Capital Assets: Patent Transfers (¶12,125) 4. Capital Assets: Franchise Transfers (¶12,135) 5. Capital Assets: Lease Cancellation Payments (¶12,155) 6. Holding Period: Exchanges of Property (¶12,215) 7. Holding Period: Gifts and Inherited Property (¶12,215) 8. Taxable Income: Net Overall Gain (¶12,301) 9. Taxable Income: Net Overall Loss (¶12,301) 10. Taxable Income: Capital Loss Carryovers (¶12,315) 11. Capital Gain or Loss: Corporate v. Individual Taxpayers (¶12,401) 12. Nonbusiness Bad Debts (¶12,501) 13. Worthless Securities (¶12,515) 14. Section 1244 Stock (¶12,525) 15. Subdivided Real Estate (¶12,545) 16. Section 1231 Assets (¶12,601) 17. Section 1231 Assets: Includible Property (¶12,615) 18. Section 1231 Assets: Excludable Property (¶12,615) 19. Section 1231 Assets: First Netting (¶12,645) Chapter 12
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Instructor's Manual 201 20. Section 1231 Assets: Second Netting (¶12,645) 21. Section 1245 Property (¶12,701) 22. Section 1245 Property: Recapture Rule (¶12,715 and ¶12,725) 23. Section 1250 Property: Definition (¶12,801) 24. Section 1250 Property: Recapture Rules (¶12,815) 25. Section 1245 and 1250 Property: Recapture Rules (¶12,901) 26. Section 1245 and 1250 Property: Death of Property Owner (¶12,901) 27. Section 1245 and 1250 Property: Like-Kind Exchanges (¶12,915) 28. Recapture Rules: Involuntary Conversions (¶12,915) 29. Recapture Rules: Charitable Contributions (¶12,925) Answers to Questions Capital Assets: Definition 1. Capital assets are not really defined in the Code. Instead, Section 1221 defines a capital asset as any property held by the taxpayer except:
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 17

Chap12%20HW%20Solutions - 200 CCH Federal Taxation-Basic...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online