Comprehensive Problem 11-74 (LO 11-1, LO 11-2, LO 11-3, LO 11-4, LO 11-5, LO 11-6) Fizbo Corporation is in the business of breeding and racing horses. Fizbo has taxable income of $5,000,000 other than from these transactions. It has nonrecaptured $1231 losses of $10,000 from 2014 and $13,000 from 2012. Consider the following transactions that occur during 2018: a. A building with an adjusted basis of $300,000 is totally destroyed by fire. Fizbo receives insurance proceeds of $400,000, but does not plan to replace the building. The building was built 12 years ago at a cost of $420,000 and was used to provide lodging for employees. b. Fizbo sells four acres of undeveloped farmland (used for grazing) for $50,000. Fizbo purchased the land 15 years ago for $15,000. C. Fizbo sells a racehorse for $250,000. The racehorse was purchased four years ago for $200,000. Total depreciation taken on the d. Fizbo exchanges equipment that was purchased three years ago for $300,000 for $100,000 of IBM common stock. The adjusted e. On November 1, Fizbo sold XCON stock for $50,000. Fizbo had purchased the stock on December 12, 2017, for $112,000. racehorse was $160,000. basis of the equipment is $220,000. If straight-line depreciation had been used, the adjusted basis would be $252,000 Required 1. After all netting is complete, what is Fizbo's total amount of income from these transactions to be treated as ordinary income or loss? What is its capital gain or loss? 2. What is Fizbo's taxable income for the year after including the effects of these transactions? Complete this question by entering your answers in the tabs below Req 1 Req 2 After all netting is complete, what is Fizbo's total amount of income from these transactions to be treated as ordinary income or loss? What is its capital gain or loss? Required 1. After all netting is complete, what is Fizbo's total amount of income from these transactions to be treated as ordinary income or loss? What is its capital gain or loss? 2. What is Fizbo's taxable income for the year after including the effects of these transactions? Complete this question by entering your answers in the tabs below Req 1 Req 2 After all netting is complete, what is Fizbo's total amount of income from these transactions to be treated as ordinary income or loss? What is its capital gain or loss? ains, losses and character for each of the dispositions. Adjusted Gain/(Loss) Amount Realized Asset Character Basis $291 gain $1231 gain recapture 1245 $1231 loss STCL Building Farm land Racehorse Equipment XCON Stock Ordinary income (loss) Capital gain (loss) Consider the following transactions that occur during 2018: a. A building with an adjusted basis of $300,000 is totally destroyed by fire. Fizbo receives insurance proceeds of $400,000, but does not plan to replace the building. The building was built 12 years ago at a cost of $420,000 and was used to provide lodging for employees. b. Fizbo sells four acres of undeveloped farmland (used for grazing) for $50,000. Fizbo purchased the land 15 years ago for $15,000. c. Fizbo sells a racehorse for $250,000. The racehorse was purchased four years ago for $200,000. Total depreciation taken on the d. Fizbo exchanges equipment that was purchased three years ago for $300,000 for $100,000 of IBM common stock. The adjusted e. On November 1, Fizbo sold XCON stock for $50,000. Fizbo had purchased the stock on December 12, 2017, for $112,000. racehorse was $160,000. basis of the equipment is $220,000. If straight-line depreciation had been used, the adjusted basis would be $252,000. Required After all netting is complete, what is Fizbo's total amount of income from these transactions to be treated as ordinary income or loss? What is its capital gain or loss? 2. What is Fizbo's taxable income for the year after including the effects of these transactions? Complete this question by entering your answers in the tabs below What is Fizbo's taxable income for the year after including the effects of these transactions? Taxable income before transactions Ordinary income Taxable income K Req 1 Req 2
