1.) Compute Real Property Recapture for this Corporate Taxpayer:

	Property A	Property B	Property C
Year Acquired	1986	2002	2011
Cost	$450,000	$250,000	$2,600,000
Selling Price (FMV)	600,000	185,000	2,560,000
Accumulated Depreciation:
Accelerated -	330,000	n/a	n/a
Straight-Line -	255,000	136,500	105,000
Adjusted Basis	120,000	213,500	2,495,000

a) What is Realized Gain/(Loss)?

-- Property A=

-- Property B=

-- Property C=

b) What is amount of 1250 recapture?

-- Property A=

-- Property B=

-- Property C=

c) What is amount of 291 recapture?

-- Property A=

-- Property B=

-- Property C=

Notes:

* - Assume residential property - 1245 rules do not apply.

1 - S/L depreciation is "pro forma"

2.) Fill In Blanks (X)

	Property A	Property B	Property C
Year Acquired	1986	2002	2011
Cost	$ 450,000	$ 250,000	$ 2,600,000
Selling Price (FMV)	600,000	185,000	2,560,000
Accumulated Depreciation:
Accelerated -	330,000	n/a	n/a
Straight-Line -	255,000	136,500	105,000
Adjusted Basis	120,000	213,500	2,495,000
Realized Gain/(Loss)	480,000	(28,500)	65,000
Recapture:
1250 -	75,000 2	X 3,4	X 4
291 -	X	X	X
Pro-forma 1245 recapture:
(lesser of gain or all Acc. Depr.)	330,000	X 3	65,000
Less: 1250 recapture	(75,000)	X	X
Excess =	255,000	X	65,000
Recapture Rate	20.00%	20.00%	20.00%
Additional 291 Recapture	51,000	X	13,000
Total Depreciation Recapture	$126,000	X	$13,000

Notes:

* - Assume residential property - 1245 rules do not apply.

1 - S/L depreciation is "pro forma"

2 - Lesser of realized gain or excess of accelerated over straight-line (partial recapture rule).

3 - No recapture if no realized gain.

4 - No 1250 recapture as property was depreciated using straight-line (no partial recapture).

3.) How should each taxpayer treat the following gains/losses?

No.	Type	Taxpayer A	Taxpayer B	Taxpayer C
1	LTCG	4,500	1,200	15,000
2	LTCL	(6,000)	(8,000)	(6,000)
3	STCL	-	(1,200)	(1,700)
4	STCG	1,000	1,250	1,000
5	1231 Gain	-	-	6,000
6	1231 Loss	-	-	(2,200)
7	1245 Recapture		1,400	8,500
8	1250 Recapture		800	-

Individual: Less than $3,000 so fully deductible in current year.

Corporation: No current deduction - subject to carryback/forward rules.

Individual: Only $3,000 currently deductible - balance of $3,750 carried forward.

Corporation: No current deduction - subject to carryback/forward rules.

Individual: Generally taxed at preferential rate of 15% or 20%.

Corporation: No special rate, but capital gains can offset capital losses (carryback/forward).