Chapter_11_Solutions

Chapter_11_Solutions - 2 What is the gain realized In this...

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HA 4422 Review Session Chapter 11 You sell a business use asset for $20,000 cash Adjusted basis was $10,000 (purchased 3 years ago) Original cost was $15,000 Depreciation taken $5,000 1 What is the gain realized? 1a How much of the gain will be taxed as capital gain and how much will be taxed at ordinary rates? Same as above except the buyer also assumed a loan of $1,000
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Unformatted text preview: 2 What is the gain realized? In this year you incur a net 1231 gain of $5,000. The only 1231 loss you have experienced was 3 years ago in the amount of $3,000. 3 How much of this years gain will be treated as ordinary and how much as capital?...
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