A building (a Section 1231 asset that is also a Section 1250 asset) was purchased on March 10, Year 1 for $730,000. It is residential real property (27.5-year MACRS property) and cost recovery (accumulated depreciation) totals $252,167 when it is sold. The property was sold for $860,000 on September 10, Year 10. You will need to type your calculation and answer in the box. For example, type in "20,000 - 5,000 = 15,000" to calculate the adjusted basis of an asset that cost 20,000 and had accumulated depreciation of 5,000 when sold. Some items do not need a calculation so for those items just type in the answer. What will follow will be 6 questions related to this asset sale. Provide an answer for every question even if the amount is 4. How much of the gain (loss) is §1250 recapture?

A building (a Section 1231 asset that is also a Section 1250 asset) was purchased on March 10, Year 1 for $730,000. It is residential real property (27.5-year MACRS property) and cost recovery (accumulated depreciation) totals $252,167 when it is sold. The property was sold for $860,000 on September 10, Year 10. You will need to type your calculation and answer in the box. For example, type in "20,000 - 5,000 = 15,000" to calculate the adjusted basis of an asset that cost 20,000 and had accumulated depreciation of 5,000 when sold. Some items do not need a calculation so for those items just type in the answer. What will follow will be 6 questions related to this asset sale. Provide an answer for every question even if the amount is 4. How much of the gain (loss) is §1250 recapture?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 11EB: The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining...

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Akron Incorporated purchased an asset at the beginning of Year 1 for 375,000. The estimated residual value is 15,000. Akron estimates that the asset has a service life of 5 years. Calculate the depreciation expense using the sum-of-the-years-digits method for Years 1 and 2 of the assets life.
Jerry uses a building for business purposes. The building was purchased on April 1, year 3, for 124,000. It was sold on October 3, year 6, for 200,000. Accumulated depreciation as of the date of sale was 14,000, 4,000 of which was in excess of straight line. How much of the gain in year 6 is unrecaptured Section 1250 gain? a. 4,000 b. 10,000 c. 14,000 d. 100,000
The following intangible assets were purchased by Hanna Unlimited: A. A patent with a remaining legal life of twelve years is bought, and Hanna expects to be able to use it for six years. It is purchased at a cost of $48,000. B. A copyright with a remaining life of thirty years is purchased, and Hanna expects to be able to use it for ten years. It is purchased for $70,000. Determine the annual amortization amount for each intangible asset.
Bliss Company owns an asset with an estimated life of 15 years and an estimated residual value of zero. Bliss uses the straight -line method of depreciation. At the beginning of the sixth year, the assets book value is 200,000 and Bliss changes the estimate of the assets life to 25 years, so that 20 years now remain in the assets life. Explain how this change will be accounted for in Blisss financial statements, and compute the current and future annual depreciation expense.