Question

[The following information applies to the questions displayed below.] Buckley, an individual, began business two years ago and has never sold a $1231 asset. Buckley has owned each of the assets since he began the business. In the current year, Buckley sold the following business assets: Accumulated Asset Original Cost Depreciation Gain/Loss Computers $ 6,000 $ 2,000 $ (3,000) Machinery 10,000 4,000 (2,000) Furniture 20.000 12.000 7,000 Building 100,000 10.000 (1.000) Assuming Buckley's marginal ordinary income tax rate is 32 percent, answer the questions for the following alternative scenarios: (Loss amounts should be indicated by a minus sign. Input all other amounts as positive values.) Required: c1. Assume that the amount realized increased so that the building was sold at a $15,000 gain instead. What is the amount and character of Buckley's gains or losses for the current year? c2. Calculate Buckley's tax liability or tax savings for the year. Complete this question by entering your answers in the tabs below. Show less Req c1 Req c2 Assume that the amount realized increased so that the building was sold at a $15,000 gain instead. What is the amount and character of Buckley's gains or losses for the current year? Description won Amount

Answer 1

Page- Sol: Amount (cAE Computen Delaiptian 3000 1331 L విం0- machinery 193 Lo 4000 1945 ресорtиre. Furniture $ 10,000 Buiiding un captured1350gain 5000 Butiding $1331gain become 1331 dtha Since Buckley has adivard Recap tured1250 gain a 193i and the gain taxed at a maximum Ratc 35 Caluclate RuCkley's tax liabitity tarSairy Year (Ca) F&the Talaxb) Rate (b) chatacter Amount ca) (100ox 32) 1000 321 124 5 Recapture 3HO 10000 Y5 951 0 000 2500 TO tal

Page- Auckley aain tayed at 5 ard a 13 qain ha a unoecapteured 150 gaina f a31 l0,000 vom which he buiding toxed at 15 5000 The (65,000) 1 133 (oks ($ 3000 uam Computeor +(200) tnom machinery)wiu et the tS taxed 131 gain jibt agairnt un pecaptured 250ain oj Hence thae 10,o00 Remaî ns