CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
41st Edition
ISBN: 9781337389518
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 8, Problem 19DQ
To determine
Explain the relevant tax issues for Mr. G.
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Heron Company purchases commercial realty on November 13, 2002, for $650,000. Straight-line depreciation of $287,492 is claimed before the property is sold on February 22, 2020, for $850,000. What are the tax consequences of the sale of realty if Heron is:
A C corporation?
Assume that a company that incorporated (just started business) on February 25, 2017, and purchased a truck for $35,000 on April 14, 2017. The company purchased two small excavators for $20,000 each on June 1, 2019. The following year, on March 20, 2020, the company traded the truck and, with an additional $12,000 cash, purchased a bulldozer. Finally, consider the tax consequences if on November 1, 2020 sold one excavator for $10,000. All the above assets fall into CRA Class 10, which has a 30% CCA rate.
How much CCA can the company claim in 2019?
Question 20 options:
$11,355.50
$12,500.50
$14,249.00
$12,247.50
Question 22
If expected dividend from a stock is $3.00, market price of the stock today is $30.00 and expected price of the stock at the end of Year 1 is $33.00. What is the stock’s total expected return for the coming year?
Question 22 options:
20%
6%
10%
16%
Heron Company purchases commercial realty on November 13, 2003, for $650,000. Straight-line depreciation of $287,492 is claimed
before the property is sold on February 22, 2021, for $850,000.
What are the tax consequences of the sale of realty if Heron is (a) a C corporation and (b) a sole proprietorship?
a. If Heron is a C corporation, what is the amount of each type of gain recognized?
If an amount is zero, enter "0". Round your answers to the nearest dollar.
Character of Gain
Ordinary income under § 1245
Ordinary income under § 1250
Ordinary income under § 291.
§ 1231 gain
Total recognized gain
287,492 X
§ 1231 gain
Total recognized gain
0
57,498
429,994
487,492
b. If Heron is a sole proprietorship, what is the amount of each type of gain recognized?
Character of Gain
Ordinary income under § 1245
Ordinary income under 5 1250
Ordinary income under § 291
0
0
0
487,492
487,492
✓
Chapter 8 Solutions
CengageNOWv2, 1 term Printed Access Card for Hoffman/Young/Raabe/Maloney/Nellen's South-Western Federal Taxation 2018: Individual Income Taxes, 41st
Ch. 8 - Prob. 1DQCh. 8 - Prob. 2DQCh. 8 - Prob. 3DQCh. 8 - Prob. 4DQCh. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - Prob. 7DQCh. 8 - LO.2 Robert purchased and placed in service...Ch. 8 - LO.2 Jim owns a very large ranch. A large part of...Ch. 8 - Prob. 10DQ
Ch. 8 - Prob. 12DQCh. 8 - Discuss the definition of business income as it is...Ch. 8 - Prob. 14DQCh. 8 - Prob. 15DQCh. 8 - Prob. 16DQCh. 8 - Prob. 17DQCh. 8 - Prob. 18DQCh. 8 - Prob. 19DQCh. 8 - Prob. 20DQCh. 8 - Prob. 21CECh. 8 - Prob. 22CECh. 8 - Prob. 23CECh. 8 - Prob. 24CECh. 8 - Prob. 25CECh. 8 - Prob. 26CECh. 8 - Prob. 27CECh. 8 - Prob. 28CECh. 8 - Prob. 29CECh. 8 - Prob. 30CECh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45PCh. 8 - Prob. 46PCh. 8 - Prob. 47PCh. 8 - Prob. 48PCh. 8 - Prob. 49PCh. 8 - Prob. 50PCh. 8 - Prob. 51PCh. 8 - LO.2, 5, 9 Jamie purchased 100,000 of new office...Ch. 8 - Prob. 53PCh. 8 - Prob. 54PCh. 8 - Prob. 55PCh. 8 - Prob. 56PCh. 8 - Prob. 57CPCh. 8 - Prob. 58CPCh. 8 - Prob. 1RPCh. 8 - Prob. 2RPCh. 8 - Prob. 3RPCh. 8 - Michael Sima, a sole proprietor craftsman,...Ch. 8 - Cox Construction, a company in its 10th year of...Ch. 8 - Stem Corp. bought a machine in February of year 7...Ch. 8 - Prob. 4CPACh. 8 - Data, Inc., purchased and placed in service a...Ch. 8 - Data, Inc., purchased and placed in service 5,000...Ch. 8 - Which statement below is correct? a. Real property...
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