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Second determine the 1245 recapture potential this is

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Second, determine the § 1245 recapture potential: This is the lesser of $589,765 (recognized gain) or $89,765 (cost recovery claimed).Third, determine the § 1250 recapture amount: Cost recovery $89,765 - straight-line cost recovery ($89,765) = § 1250 ordinary income$0.
2/19/2021CengageNOWv2 | Assignments | ViewFeedbackCheck My WorkCorrectSolutiona.Compute the amount of Aqua's recognized gain on the sale of the realty.Fourth, because the taxpayer is a corporation, determine the additional § 291 amount:§ 1245 recapture potential:$89,765Less § 1250 recapture amount:$0Excess § 1245 recapture potential:$89,765Apply § 291 percentage:x 20%Additional ordinary income under §291:$17,953As result the total gain of $589,765 is recognized as follows:§ 1250 gain of $0 which is treated as ordinary income.§ 291 gain of $17,953 which is treated as ordinary income.§ 1231 gain of $571,812 ($589,765 - $0 - $17,953).
2/2No Check My Work uses2b.Determine the amount of the recognized gain that is treated as § 1231 gain and the amount that is treated as § 1250 recapture(ordinary income due to due to § 291).§ 1231 gain:$571812§ 1250 recapture (ordinary income due to § 291):$17953
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Term
Fall
Professor
Hawkins
Tags
Generally Accepted Accounting Principles, Depreciation recapture, Aqua Corporation

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