ACC 5170 chapter 10 f 10

ACC 5170 chapter 10 f 10 - CHAPTER 10 PROPERTY...

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CHAPTER 10 PROPERTY DISPOSITIONS: CAPITAL, §1231, RECAPTURE & NONRECOGNITION
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Determination of Gain/Loss Realized gain or loss Amount realized Adjusted basis Capital additions Capital recoveries Recognized gain or loss Realized gains may be deferred or excluded Realized losses may be deferred or disallowed
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Classification of Gains/Losses Depends on 3 factors Type of property Capital, §1231, or ordinary Manner of disposition Sale, exchange, casualty, theft, condemnation, etc. Holding period Short vs long term
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Capital Assets What are capital assets? §1221 defines capital assets as…. Everything except Inventory (stock in trade) Notes and accounts receivables acquired from the sale of inventory or performance of services Realty and depreciable property used in trade or business (§1231 assets) Certain copyrights; literary, musical, or artistic compositions; or letters, memoranda, or similar property when created by taxpayer (Supplies of a type regularly used or consumed in the ordinary course of a business Certain publications of U.S. government
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Capital Assets So….What are Capital Assets? Assets held for investment Personal use assets Miscellaneous assets selected by Congress
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§1231 Assets What are §1231 Assets? Depreciable and real property used in a business or for production of income and held greater than 1 year Includes timber, coal, iron, livestock, unharvested crops Certain purchased intangibles
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§1231 Assets §1231 Assets are not Property not held for the long-term holding period Nonpersonal use property where casualty losses exceed casualty gains for the taxable year Inventory and property held primarily for sale to customers Copyrights, literary, musical, or artistic compositions and certain U.S. government publications Accounts receivable and notes receivable arising in the ordinary course of a trade or business
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Holding Period – Capital Assets Short-term Asset held for 1 year or less Long-term Asset held for more than 1 year Holding period starts on the day after the property is acquired and includes the day of disposition
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This note was uploaded on 04/15/2011 for the course ACC 5170 taught by Professor Jones during the Spring '10 term at Wayne State University.

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ACC 5170 chapter 10 f 10 - CHAPTER 10 PROPERTY...

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