Miguel receives tangible personal property as an inheritance in 2019. The property was depreciated by the deceased (Miguel's father), and Miguel will also depreciate it. At the date of the deceased's death, the property was worth $532,000. The deceased had purchased it for $900,000 and taken $523,000 of depreciation on the property. Miguel takes $223,000 of depreciation on the property before selling it for $482,000 in 2021. a. Indicate whether the following statements are "True" or "False" regarding the tax status when Miguel sells the property. Any gain Miguel has will be treated as long-term capital gain. False • Miguel's basis for the asset is $532,000. True • The property is a § 1231 asset for Miguel. True • Any recapture potential does not carry over to Miguel. True b. If an amount is zero, enter "0". Miguel has a gain of X as a result of the sale, of which $ is treated as ordinary income V due to § 1245 and $ V is treated as § 1231 gain.
Miguel receives tangible personal property as an inheritance in 2019. The property was depreciated by the deceased (Miguel's father), and Miguel will also depreciate it. At the date of the deceased's death, the property was worth $532,000. The deceased had purchased it for $900,000 and taken $523,000 of depreciation on the property. Miguel takes $223,000 of depreciation on the property before selling it for $482,000 in 2021. a. Indicate whether the following statements are "True" or "False" regarding the tax status when Miguel sells the property. Any gain Miguel has will be treated as long-term capital gain. False • Miguel's basis for the asset is $532,000. True • The property is a § 1231 asset for Miguel. True • Any recapture potential does not carry over to Miguel. True b. If an amount is zero, enter "0". Miguel has a gain of X as a result of the sale, of which $ is treated as ordinary income V due to § 1245 and $ V is treated as § 1231 gain.
Chapter14: Property Transactions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 82P
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Transcribed Image Text:Problem 14-81 (LO. 8, 9, 11)
Miguel receives tangible personal property as an inheritance in 2019. The property was depreciated by the deceased (Miguel's father), and
Miguel will also depreciate it. At the date of the deceased's death, the property was worth $532,000. The deceased had purchased it for
$900,000 and taken $523,000 of depreciation on the property. Miguel takes $223,000 of depreciation on the property before selling it for
$482,000 in 2021.
a. Indicate whether the following statements are "True" or "False" regarding the tax status when Miguel sells the property.
• Any gain Miguel has will be treated as long-term capital gain.
False
Miguel's basis for the asset is $532,000.
True
The property is a § 1231 asset for Miguel.
True
• Any recapture potential does not carry over to Miguel.
True
b. If an amount is zero, enter "0".
Miguel has a gain of $
X as a result of the sale, of which :
is treated as ordinary income
due
to § 1245 and $
V is treated as § 1231 gain.
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