Albert's sole proprietorship owns the following assets. Accounts receivable Inventory Machinery and equipment* Buildings** Land Potential § 1245 recapture of $45,000. ** Straight-line depreciation used. Adjusted Basis Fair Market Value S 20,000 50.000 120,000 80.000 $270,000 $ 60.000 O $230,000 ordinary income. O $230,000 capital gain. $115,000 ordinary income and $115,000 capital gain. O $110,000 ordinary income and $120,000 capital gain. 30,000 90,000 170.000 140.000 $490,000 Albert sells his sole proprietorship for $500,000. Calculate Albert's recognized gain or loss and classify it as capital or ordinary.
Albert's sole proprietorship owns the following assets. Accounts receivable Inventory Machinery and equipment* Buildings** Land Potential § 1245 recapture of $45,000. ** Straight-line depreciation used. Adjusted Basis Fair Market Value S 20,000 50.000 120,000 80.000 $270,000 $ 60.000 O $230,000 ordinary income. O $230,000 capital gain. $115,000 ordinary income and $115,000 capital gain. O $110,000 ordinary income and $120,000 capital gain. 30,000 90,000 170.000 140.000 $490,000 Albert sells his sole proprietorship for $500,000. Calculate Albert's recognized gain or loss and classify it as capital or ordinary.
Chapter17: Property Transactions: § 1231 And Recapture Provisions
Section: Chapter Questions
Problem 37P
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT