d Tom Truman sells a business machine which he has owned for four years for

D tom truman sells a business machine which he has

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d. Tom Truman sells a business machine which he has owned for four years for $27,000. Tom purchased the 78. machine for $42,000 and has taken $18,000 in depreciation. How much and what type of gain will result from this sale?$3,000 long-term capital gain a. $3,000 ordinary incomeb. $18,000 ordinary income; $3,000 long-term capital gainc. $3,000 Section 1231 gain d. Susan Songbird sold a word processor used in her business for $550. She had purchased the word 79. processor three years ago for $950 and has taken $300 in depreciation. How much and what type of gain or loss will Susan have on the sale?$300 ordinary income d. On January 4, 1980, Rita Racksaw purchased a warehouse for $200,000 with an estimated life of 40 80. years to be used in her business. On January 5, 2010, she sold the warehouse for $150,000. She used an accelerated depreciation method resulting in $170,000 depreciation. Straight-line depreciation would have been $140,000. How much and what type of gain will Rita have on the sale? d. On January 4, 1986, Rita Racksaw purchased a warehouse for $150,000. In 2010, she sold the warehouse 81. for $107,000. She took $135,000 depreciation under ACRS and straight-line depreciation would have been $125,000. How much and what type of income or gain would Rita have on the sale?
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592 CCH Federal Taxation—Basic Principles Chapter 12 © 2010 CCH. All Rights Reserved. Wade Woodruff purchased a factory building on February 28, 1986 for $375,000. At the time of Wade’s 82. death in 2010, he had taken $20,000 in excess depreciation. The factory building was transferred to his son John at the time of Wade’s death and John sold it immediately after receiving it at a gain of $30,000. What amount of depreciation needs to be recaptured by Wade’s estate and what amount by John? $0/$0a. $20,000/$0b. $0/$20,000c. $10,000/$10,000 d. Jennifer Judd gives her son, Jim, Section 1245 property. The property has an adjusted basis of $11,000 83. to Jennifer, who has taken $2,000 in depreciation expense. Jim uses the property for three years, takes depreciation of $3,000 and then sells it for $14,000. What amount of gain must Jennifer recognize and what amount of gain must Jim recognize?
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