Abbott is single and is in the 32% marginal income tax bracket. He has the sales or exchanges below. At the beginning of the year, he has nonrecaptured net Sec. 1231 losses of $14,000. Review the following independent sales or exchanges. |(Click the icon to view the independent sales or exchanges.) (Click the icon to view the capital gains and dividends rates table.) (Click the icon to view the tax rates table.) Read the requirement. a. Sells equipment used in his trade or business for $90,000. The equipment was purchased for $150,000 and depreciation allowed amounts to $96,000. (Use a minus sign or parentheses for a decrease in the tax liability.) The sale of equipment used in Abbott's trade or business will increase/decrease tax liability by b. Sells land used in his trade or business for $89,000. The land was purchased four years ago for $58,000. (Use a minus sign or parentheses for a decrease in the tax liability.) The sale of land used in Abbott's trade or business will increase/decrease tax liability by c. He sells a building used in his trade or business for $180,000. The building was purchased in 1997 for $256,000 and depreciation allowed amounts to $128,000. (Use a minus sign or parentheses for a decrease in the tax liability.) The sale of building used in Abbott's trade or business will increase/decrease tax liability by d. Same as part c except he sells the building for $122,000. (Use a minus sign or parentheses for a decrease in the tax liability.) In this situation, the sale of a building used in Abbott's trade or business will increase/decrease tax liability by a. Sells equipment used in his trade or business for $90,000. The equipment was purchased for $150,000 and depreciation allowed amounts to $96,000. b. Sells land used in his trade or business for $89,000. The land was purchased four years ago for $58,000. c. He sells a building used in his trade or business for $180,000. The building was purchased in 1997 for $256,000 and depreciation allowed amounts to $128,000. d. Same as part c except he sells the building for $122,000. Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: Ordinary income tax rates (up to 37% in 2020) for gains on assets held one year or less 28% rate on collectibles gains and includible Sec. 1202 gains Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: Preferencial Rate Single Filing Jointly* Head of Household 0% Up to $40,125 Up to $40,125 Up to $40,125 15% > $40,125 but not over $40,125 > $40,125 but not over $40,125 > $40,125 but not over $40,125 20% Over $40,125 Over $40,125 Over $40,125 * The corresponding amounts if married filing separately are half of the amounts for filing jointly. The preferential rate is zero for taxable income up to $40,125 if married filing separately. Single If taxable income is: The tax is: 10% of taxable income. $987.50 + 12% of the excess over $9,875. . $4,617.50 + 22% of the excess over $40,125. Not over $9,875 Over $9,875 but not over $40,125 Over $40,125 but not over $85,525 Over $85,525 but not over $163,300 Over $163,300 but not over $207,350 Over $207,350 but not over $518,400 ... $14,605.50 + 24% of the excess over $85,525. ... $33,271.50 + 32% of the excess over $163,300. . $47,367.50 + 35% of the excess over $207,350. $156,235.00 + 37% of the excess over $518,400. Over $518,400 Abbott is single and is in the 32% marginal income tax bracket. He has the sales or exchanges below. At the beginning of the year, he has nonrecaptured net Sec. 1231 losses of $14,000. Review the following independent sales or exchanges. |(Click the icon to view the independent sales or exchanges.) (Click the icon to view the capital gains and dividends rates table.) (Click the icon to view the tax rates table.) Read the requirement. a. Sells equipment used in his trade or business for $90,000. The equipment was purchased for $150,000 and depreciation allowed amounts to $96,000. (Use a minus sign or parentheses for a decrease in the tax liability.) The sale of equipment used in Abbott's trade or business will increase/decrease tax liability by b. Sells land used in his trade or business for $89,000. The land was purchased four years ago for $58,000. (Use a minus sign or parentheses for a decrease in the tax liability.) The sale of land used in Abbott's trade or business will increase/decrease tax liability by c. He sells a building used in his trade or business for $180,000. The building was purchased in 1997 for $256,000 and depreciation allowed amounts to $128,000. (Use a minus sign or parentheses for a decrease in the tax liability.) The sale of building used in Abbott's trade or business will increase/decrease tax liability by d. Same as part c except he sells the building for $122,000. (Use a minus sign or parentheses for a decrease in the tax liability.) In this situation, the sale of a building used in Abbott's trade or business will increase/decrease tax liability by a. Sells equipment used in his trade or business for $90,000. The equipment was purchased for $150,000 and depreciation allowed amounts to $96,000. b. Sells land used in his trade or business for $89,000. The land was purchased four years ago for $58,000. c. He sells a building used in his trade or business for $180,000. The building was purchased in 1997 for $256,000 and depreciation allowed amounts to $128,000. d. Same as part c except he sells the building for $122,000. Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: Ordinary income tax rates (up to 37% in 2020) for gains on assets held one year or less 28% rate on collectibles gains and includible Sec. 1202 gains Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: Preferencial Rate Single Filing Jointly* Head of Household 0% Up to $40,125 Up to $40,125 Up to $40,125 15% > $40,125 but not over $40,125 > $40,125 but not over $40,125 > $40,125 but not over $40,125 20% Over $40,125 Over $40,125 Over $40,125 * The corresponding amounts if married filing separately are half of the amounts for filing jointly. The preferential rate is zero for taxable income up to $40,125 if married filing separately. Single If taxable income is: The tax is: 10% of taxable income. $987.50 + 12% of the excess over $9,875. . $4,617.50 + 22% of the excess over $40,125. Not over $9,875 Over $9,875 but not over $40,125 Over $40,125 but not over $85,525 Over $85,525 but not over $163,300 Over $163,300 but not over $207,350 Over $207,350 but not over $518,400 ... $14,605.50 + 24% of the excess over $85,525. ... $33,271.50 + 32% of the excess over $163,300. . $47,367.50 + 35% of the excess over $207,350. $156,235.00 + 37% of the excess over $518,400. Over $518,400