This year, Sigma Inc. generated $662.250 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis $ 149,600 $ 103,600 Acc. Sale Depr. es 75,000 41,750 Price Marketable securities Production equipment Business realty: 82,880 237,000 278,e00 Land 247,250 210,500 Building 81,000 *Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
This year, Sigma Inc. generated $662.250 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months: Initial Basis $ 149,600 $ 103,600 Acc. Sale Depr. es 75,000 41,750 Price Marketable securities Production equipment Business realty: 82,880 237,000 278,e00 Land 247,250 210,500 Building 81,000 *Through date of sale. Required: a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses. b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 1BCRQ
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Transcribed Image Text:This year, Sigma Inc. generated $662,250 income from its routine business operations. In addition, the corporation sold the following
assets, all of which were held for more than 12 months:
Initial
Sale
Price
O$ 75,000
41,750
Acc.
Basis
Depr.*
$ 149,600 $
103,600
Marketable securities
Production equipment
Business realty:
Land
Building
82,880
237,000
270,000
247,250
210,500
81,000
*Through date of sale.
Required:
a. Compute Sigma's taxable income assuming that it used the straight-line method to calculate depreciation on the building and has
no nonrecaptured Section 1231 losses.
b. Recompute taxable income assuming that Sigma sold the securities for $159,200 rather than $75,000.
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