44) 44) During the current year, Danika recognizes a $30,000 Sec. 1231 gain and a $22,000 Sec. 1231 loss. Prior to this, Danika's only Sec. 1231 item was a $15,000 loss two years ago. Danika must report an) A) $15,000 ordinary income. B) $8,000 net LTCG. C) $8,000 ordinary income. D) $8,000 ordinary income and $7,000 net LTCG. 45) 45) In April of 2020, Brandon acquired equipment which is five-year listed property (not an automobile) for $30,000 and used it 70% for business. Brandon did not claim Sec. 179 or bonus depreciation. In 2021, his business use of the property dropped to 40%. Which of the following statements is true? A) Brandon must recapture $2,100 as ordinary income. B) Brandon must amend the previous tax return and recompute depreciation. C) The change does not affect Brandon's previous depreciation. D) Brandon must recapture $4,200 as ordinary income. 46) 46) The installment method may be used for sales of all kinds of property with the exception of A) marketable securities. B) capital assets. C) personal property. D) real property 47) 47) Sometimes taxpayers should structure a transaction to avoid the application of like-kind provisions. Which of the following conditions is likely to cause a taxpayer to avoid like-kind treatment? A) a decline in the value of the asset being disposed of B) expected higher tax rates in the future C) less accelerated depreciation provisions expected in the future D) none of the above 48) 48) A corporation sold a warehouse during the current year. The company purchased the building 25 years ago. Details are as follows Cost Accumulated Depreciation Selling Price $800,000 620,000 890,000 How much gain should the corporation report as Sec. 1231 gain? A) $90,000 B) $586,000 C) $710,000 D) $124,000 49) 49) In February 2021, Pietra acquired a new automobile for $82,000 and used the automobile 80% for business. In 2022 her business use of the auto was 70%. Pietra's depreciation deduction for 2022 will be A) $4,032. B) $18,368 C) $12,670. D) $11,270. 50) 50) Emma, a single taxpayer, obtains permission to change from a calendar year to a fiscal year ending June 30, 2021. During the six months ending June 30, 2021, she earns $40,000 and has $8,000 of itemized deductions. What is the amount of her annualized income? A) $64,000 B) $28,000 C) $56,000 D) $32,000 8