Question
A single taxpayer started a business in 2016 and has owned the following properties since the business started. The pre ny of these properties. The
A single taxpayer started a business in 2016 and has owned the following properties since the business started. The pre ny of these properties. The taxpayer's marginal ordinary income tax rate is 32 percent SO In 2020, the taxpayer sold the following business properties Property Accumulated Original Cost Sales Price Depreciation Building 100,000 10,000 105,000 Computers $6,000 $2,000 $1,000 Machinery 10,000 4,000 4,000 Furniture 20,000 13,000 15,000 5930 a). Now assume that the building was sold at $105,000. For each asset, how much is the gain/loss and what is the cham from the transactions? Show detailed calculation and explanation. b). How the gain/loss affects the taxpayer's tax liability in 2020? Show your detailed calculation and explanation. c). Briefly explain why depreciable real property ( 1250) is generally no longer subject to $1250 recapture
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