Residential real estate was purchased in 2014 for $375,000, held as rental property, and depreciated straight-line....

Residential real estate was purchased in 2014 for $375,000, held as rental property, and depreciated straight-line. Assume the land cost was $75,000 and the building cost was $300,000. Depreciation totaled $34,089. The building and land were sold on June 10, 2017, for $690,000 total. What is the tax status of the property, the nature of the gain from the disposition, and is any of it § 1250 depreciation recapture gain or unrecaptured § 1250 gain?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

which of the following statements about residential rental property are TRUE? The property may be depreciated...

which of the following statements about residential rental property are TRUE? The property may be depreciated using the ___________ a. ADS for a period of 30 years only by electing to in the first year the property is placed into service b. General Depreciation System for the period of 30 years c. GDS for a period of 40 years

Fox Realty purchased a residential property for $1,500,000. The latest available real estate assessment valued the...

Fox Realty purchased a residential property for $1,500,000. The latest available real estate assessment valued the property at $1,750,000 of which 20% was allocated to the land. How should record this acquisition on its books?

Calculate Lopez’s cost recovery deduction for 2019 if the building is: a. Classified as residential rental real estate. b. Classified as nonresidential real estate.

Lopez acquired a building on June 1, 2014, for $1 million. Calculate Lopez’s cost recovery deduction for 2019 if the building is: a. Classified as residential rental real estate. b. Classified as nonresidential real estate.

A machine that cost $68,616 on January 1, 2014 was depreciated by Ava Company using the straight line method.

A machine that cost $68,616 on January 1, 2014 was depreciated by Ava Company using the straight line method. The machine had no residual value and a useful life of 8 Years. On January 1. 2017, the company switched to the sum of years’-digits method. What is the depreciation expense for the year ended December 31, 2017 $____

Carmen purchased a residential-rental property over in Yakima, where prices are much lower than in Seattle....

Carmen purchased a residential-rental property over in Yakima, where prices are much lower than in Seattle. She paid $125,000 for the house, in 2018. The appraisal indicated the land was worth $25,000, and the building was worth $100,000. How much “depreciation” expense can Carmen claim on her 2019 income tax return for this property? Choose the closest number, because the amounts below may not be exact. a. $ 0 b. $ 2,500 c. $ 3,600 d. $ 4,500 e. $...

A piece of newly purchased industrial equipment costs $948,000. Assume the equipment is depreciated straight-line to...

A piece of newly purchased industrial equipment costs $948,000. Assume the equipment is depreciated straight-line to zero over its six-year tax life. The equipment is to be used in a six-year project. The relevant income tax rate is 22 percent, and the capital gains tax rate is 15 percent. If the equipment can be sold for $180,000 at the end of its project life, what is the after-tax salvage value from the sale of this equipment? $140,400 $182,720 $158,000 $135,690...

Your firm needs a $725,000 machine. If purchased, the machine will be depreciated straight-line over seven...

Your firm needs a $725,000 machine. If purchased, the machine will be depreciated straight-line over seven years and is expected to have a residual value of $25,000 at the end of the seventh year. Your (pre-tax) cost of borrowing is 6.5% and tax rate is 21%. If this is a non-tax lease, with beginning of year payments, what is the maximum lease payment for which you would prefer the lease to the alternative of borrowing money to buy the machine?

Omar paid the following taxes this year (2020): Real estate taxes on rental property he owns...

Omar paid the following taxes this year (2020): Real estate taxes on rental property he owns $5,000 Real estate taxes on his own residence 7,600 Federal income taxes 12,000 State income taxes 4,400 Local city income taxes 400 What amount can Omar deduct as an itemized deduction on his tax return? A) $7,600 B) $10,000 C) $12,400 D) $29,400 LABEL AND SHOW ALL WORK.

Jenny constructed a building for use as a residential rental property. The cost of the building...

Jenny constructed a building for use as a residential rental property. The cost of the building was $82,488, and it was placed in service on August 1, 1997. The building has a 27.5-year MACRS life. What is the amount of depreciation on the building for 2019 for tax purposes?

M sold investment real estate to B in 2020 for $100,000. M purchased the property 5...

M sold investment real estate to B in 2020 for $100,000. M purchased the property 5 years ago for $60,000. The terms of the sale indicated that B was to pay $20,000 to M in 2020, $50,000 in 2021, and the remaining balance of $30,000 in 2022. M elected to use the installment method to report the gain. Assuming the payments are made as agree upon, how much gain should M report for each year? 2022 2021 2020

Subjects