Mr. Bailey purchased an apartment complex on January 10, 2016, for $8 million with 30% of the price allocated to land. He sells the complex on October 22, 2018, for $8.7 million. Assume that 30% of the $8.7 million selling price is allocated to land and 70% is allocated to the building. (Click the icon to view the depreciation table for Residential Rental Real Property Placed in Service after 12/31/86). Read the requirements. Requirement a. How much depreciation was allowed for 2016? (Enter amount in dollars, not millions.) The depreciation allowed in 2016 was $ Requirement b. How much depreciation is allowed for 2018? (Enter amount in dollars, not millions. Do not round intermediary calculations. Only round the amount you enter in the input field to the nearest dollar.) The depreciation allowed in 2018 is $ Requirement c. Will any of the gain be ordinary income? O A. Yes, the excess of the sale proceeds over the original cost of the apartment will be taxed at Mr. Bailey's regular tax rate. OB. Yes, some or all of the Sec. 1231 gain may be ordinary income that is unrecaptured Sec. 1250 taxed at Mr. Bailey's regular tax rate. OC. No, because no depreciation recapture is required for property that is depreciated using the straight-line method if the taxpayer is a noncorporate taxpayer. OD. No, because no depreciation recapture is required for all property owned by a noncorporate taxpayer. Requirement d. What is the amount of gain and the character of the gain on the sale of the building? (Enter amounts in dollars, not millions. If an input field is not used in the table leave the input field(s) empty; do not select a label or enter a zero.) Choose from any list or enter any number in the input fields and then continue to the next question. javascript:do Exercise(47); 1 O Type here to search et e L 5 gor ^ O 7:58 PM la JX 12/10/2019 3 Mr. Bailey purchased an apartment complex on January 10, 2016, for $8 million with 30% of the price allocated to land. He sells the complex on October 22, 2018, for $8.7 million. Assume that 30% of the $8.7 million selling price is allocated to land and 70% is allocated to the building. (Click the icon to view the depreciation table for Residential Rental Real Property Placed in Service after 12/31/86). Read the requirements. - - - - - - - - - - - - - - Requirement d. What is the amount of gain and the character of the gain on the sale of the building? (Enter amounts in dollars, not millions. If an input field is not used in the table leave the input field(s) empty; do not select a label or enter a zero.) Recognized Gain Character of the gain Requirement e. What is the amount of gain and the character of the gain on the sale of the land? (Enter amounts in dollars, not millions. If an input field is not used in the table leave the input field(s) empty; do not select a label or enter a zero.) Recognized Gain Character of the gain Requirement f. Will any of the gain be taxed at 25%? (Complete all input fields. Enter a "0" for any zero amounts.) D $ of the gain will be taxed at 25% Choose from any list or enter any number in the input fields and then continue to the next question. javascript:doExercise(47); u o Type here to search De L w of OP ^ o any 7:58 PM r DX 12/10/2019 3 Mr. Bailey purchased an apartment complex on January 10, 2016, for $8 million with 30% of the price allocated to land. He sells the complex on October 22, 2018, for $8.7 million. Assume that 30% of the $8.7 million selling price is allocated to land and 70% is allocated to the building. (Click the icon to view the depreciation table for Residential Rental Real Property Placed in Service after 12/31/86). Read the requirements. Requirement a. How much depreciation was allowed for 2016? (Enter amount in dollars, not millions.) The depreciation allowed in 2016 was $ Requirement b. How much depreciation is allowed for 2018? (Enter amount in dollars, not millions. Do not round intermediary calculations. Only round the amount you enter in the input field to the nearest dollar.) The depreciation allowed in 2018 is $ Requirement c. Will any of the gain be ordinary income? O A. Yes, the excess of the sale proceeds over the original cost of the apartment will be taxed at Mr. Bailey's regular tax rate. OB. Yes, some or all of the Sec. 1231 gain may be ordinary income that is unrecaptured Sec. 1250 taxed at Mr. Bailey's regular tax rate. OC. No, because no depreciation recapture is required for property that is depreciated using the straight-line method if the taxpayer is a noncorporate taxpayer. OD. No, because no depreciation recapture is required for all property owned by a noncorporate taxpayer. Requirement d. What is the amount of gain and the character of the gain on the sale of the building? (Enter amounts in dollars, not millions. If an input field is not used in the table leave the input field(s) empty; do not select a label or enter a zero.) Choose from any list or enter any number in the input fields and then continue to the next question. javascript:do Exercise(47); 1 O Type here to search et e L 5 gor ^ O 7:58 PM la JX 12/10/2019 3 Mr. Bailey purchased an apartment complex on January 10, 2016, for $8 million with 30% of the price allocated to land. He sells the complex on October 22, 2018, for $8.7 million. Assume that 30% of the $8.7 million selling price is allocated to land and 70% is allocated to the building. (Click the icon to view the depreciation table for Residential Rental Real Property Placed in Service after 12/31/86). Read the requirements. - - - - - - - - - - - - - - Requirement d. What is the amount of gain and the character of the gain on the sale of the building? (Enter amounts in dollars, not millions. If an input field is not used in the table leave the input field(s) empty; do not select a label or enter a zero.) Recognized Gain Character of the gain Requirement e. What is the amount of gain and the character of the gain on the sale of the land? (Enter amounts in dollars, not millions. If an input field is not used in the table leave the input field(s) empty; do not select a label or enter a zero.) Recognized Gain Character of the gain Requirement f. Will any of the gain be taxed at 25%? (Complete all input fields. Enter a "0" for any zero amounts.) D $ of the gain will be taxed at 25% Choose from any list or enter any number in the input fields and then continue to the next question. javascript:doExercise(47); u o Type here to search De L w of OP ^ o any 7:58 PM r DX 12/10/2019 3
