Selling Land for $50,000 more then what the business originally purchased the Land for would result in:* O A credit to Capital for $50,000 O A debit to Capital for $50,000 O A debit to Land for $50,000 O A credit to Land for $50,000

Selling Land for $50,000 more then what the business originally purchased the Land for would result in:* O A credit to Capital for $50,000 O A debit to Capital for $50,000 O A debit to Land for $50,000 O A credit to Land for $50,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter12: Nonrecognition Transactions

Section: Chapter Questions

Problem 44IIP

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Selling Land for $50,000 more then what the business originally purchased the
Land for would result in: *
O A credit to Capital for $50,000
O A debit to Capital for $50,000
O A debit to Land for $50,000
O A credit to Land for $50,000

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