Spaulding sold a building and the land on which the

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3.Spaulding sold a building and the land on which the building sits to another company for $300,000 in 2018, where $100,000 of the purchase price was attributed to the building’s value and $200,000 of the sales price was attributed to the land’s value. Spaulding had had the building constructed in 2012 at a cost of $225,000. Spaulding had purchased the land 11 months before constructing the building for $170,000. As of the date of sale, Spaulding had claimed $75,000 of depreciation expense on the building. The building and land were the only two assets the company sold during the year. Further, assume the company had no prior unrecaptured net Sec. 1231 losses in years 2013-2017. (total of 20 points possible) a) What is the total amount of gain (or loss) on the sale overall in 2018? (10 points) b) What is the character of the gain (or loss) from the sale in 2018? As with #2 above, if there is one that one type of character, state the dollar amount of gain (loss) related to each type of character. (10 points)
3 4.Ryland Co. sold several assets in 2018, all of which were Sec. 1231 assets that were considered tangible personal property. After applying depreciation recapture and netting the Sec. 1231 gains and losses from the different assets, the company determined that it had a remaining net Sec. 1231 gain of $200,000. a) What is the ultimate character of the $200,000 gain if the company had the following net Sec. 1231 gain (losses) occur in the past? As with the above, if there is one that one type of character, state the dollar amount of gain (loss) related to each type of character. (10 points)

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