review_ex_1_fall_2010 - TAX 5015 (Fall 2010) Chapter review...

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TAX 5015 (Fall 2010) – Chapter review exercise #1 Topic review: Property transactions & individual taxation Due date: September 2, 2010 Name(s): Part 1: Cost recovery and Sec. 1245 recapture. The RedSox Corporation purchased new equipment (7-year MACRS property, ½ year convention) on January 3, 2009 for $830,000. In order to lower their current period taxes they elected to expense the maximum amount allowed in 2010. The equipment was sold on December 7, 2011. Required : What is the amount and character of the gain/loss in each of the following independent situations? (a) Selling price = $110,000 (b) Selling price = $220,000 (c) Selling price = $845,000 Part 2: Sec. 1231 netting and deprecation recapture (Secs 1245, 1250, and 291). Lowell Corporation, a C-corporation, disposed of the following assets (all Sec. 1231 property) during 2009: Asset Depreciation Method Cost MACRS depreciation Selling Price Equipment Machinery Building Land MACRS – DDB MACRS – DDB MACRS – SL --- $50,000
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This note was uploaded on 08/29/2010 for the course TAX 5015 taught by Professor Kelliher,c during the Summer '08 term at University of Central Florida.

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review_ex_1_fall_2010 - TAX 5015 (Fall 2010) Chapter review...

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