# B fill in the amount of unrecaptured net sec 1231

• Homework Help
• 4
• 0% (2) 0 out of 2 people found this document helpful

This preview shows page 3 - 4 out of 4 pages.

b) Fill in the amount of unrecaptured net Sec. 1231 losses for each of the years below after completing the look-back rule for the \$200,000 of net Sec. 1231 gain in part a)?(10 points; 2.5 points for each box (so if a value is \$0, make sure to put the \$0 rather than leave it blank))YearPortion of these net Sec. 1231 losses left unrecaptured by net. Sec. 1231 gains after2017 ends20112013201520163
5.Milaro’s Pizza was located in Burke, VA. On January 1, 2017, a grease fire from the kitchen completely destroyed the restaurant, which as of that date was valued at \$275,000. Luckily, the restaurant had taken out an insurance policy related to this type of accident when they first purchased the restaurant on February 5, 2012 for \$185,000, and the company had kept up on the insurance premiums. The accumulated depreciation as ofthe date of the fire was \$50,000. The restaurant received a check from the insurance on July 15, 2017 for the full fair market value as of the date the restaurant as destroyed. The owner immediately paid the money to a construction company to rebuild the exact same restaurant (qualified replacement property) to begin operations by November 15, 2017. (total of 20 points possible:10 points each)a.What is the total amount of the gain (or loss) Milaro’s Pizza recognizes in 2017? b.Say that instead of rebuilding the restaurant, the owner instead wants to have a lawn and garden center constructed over the same time period that she would have had the new restaurant built because she was shaken by the experience with the grease fire (no fires from plants!). The lawn and garden center does not qualify as qualified replacement property. Based on this alternative scenario, what is the total amount of the gain (or loss) that must recognized in 2017 now? 4