Brandon, an individual, b for several years. In the c
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 19P
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Transcribed Image Text:Brandon, an individual, began business four years ago and has sold $1231 assets with $5.400 of losses within the last 5 years. Brandon owned each of the assets
for several years. In the current year, Brandon sold the following business assets:
Original
Accumulated
Depreciation
$ 7,800
Asset
Cost
Gain/Loss
Machinery
$ 30,800
$10,400
Land
48,000
24,000
Building
106,000
28,000
(13, ее0)
Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability?
Use Dividends and Capital Gains Tax Rates for reference.
Multiple Choice
$21,400 ordinary income, $6,848 tax liability.
$21,400 $1231 gain and $3,210 tax liability.
$8,200 51231 gain, $13,200 ordinary income, and $5,454 tax liability.
$13,200 61231 gain, $8,200 ordinary income, and $4.604 tax liability
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