Question
Jonas owns a duplex used as residential rental property. The duplex cost $120,000 in 1986, and 20% of the cost was allocated to the land.
Jonas owns a duplex used as residential rental property. The duplex cost $120,000 in 1986, and 20% of the cost was allocated to the land. Total cost-recovery deductions allowed amount to $96,000. The statutory percentages were used to compute cost-recovery deductions. If the straight-line method of cost recovery were used instead, $96,000 of cost-recovery deductions would have been allowed. What is the amount of recognized gain and the character of the gain if Jonas sells the duplex for $131,000 with 20% the price allocated to land? (Use only one line for each "character of gain". If a box is not used in the table, leave the box empty; do not select a label or enter a zero.)
Requirement a. What is the amount of recognized gain and the character of the gain if Jonas sells the duplex for $131,000 with 20% of the price allocated to land? (Use only one line for each "character of gain". If a box is not used in the table, leave the box empty; do not select a label or enter a zero.)
Amount of Gain | Character of Gain | |
Building |
|
|
Building |
|
|
Land |
|
|
Requirement b. Same as (a) except the building is an office building. (Use only one line for each "character of gain". If a box is not used in the table leave the box empty; do not select a label or enter a zero.)
Amount of Gain | Character of Gain | |
Building |
|
|
Building |
|
|
Land |
|
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started