On July 15, 2017 Zion Company acquired a motel for $460,000 (with $20,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on March 29, 2020, for $450,000.

Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property.

If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar.

a. Compute the cost recovery and adjusted basis for the building. The cost recovery is $fill in the blank 016d93f9f070046_1, and the adjusted basis for the motel is $fill in the blank 016d93f9f070046_2.

b. What are the amount and nature of Zion's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured 1250 gain? There is $fill in the blank 6fac1b06cfc8f93_1 of recognized on the sale of the property, of which $fill in the blank 6fac1b06cfc8f93_3 is subject to 1250 recapture.

Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 2 3 4 5 6 7 8 10 11 12 1 3.485 3.182 2.879 2.576 2.273 1.970 1.667 1.364 1.061 0.758 0.45$ 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 19-27 3.637 3,637 3.637 3,637 3.637 3.637 3.637 3.637 3.637 3.637 3,632 37637 28 1.970 2.273 2.576 2.879 3.182 3.485 3,636 3.636 3.636 3.636 3.636 29 0.000 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1:364 1.667 0.152 2-18 3636 3.636 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 1 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.125 3125 3.175 3.175 3.175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.124 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0661 0.926 1.455 3.175 3.175 For Property Placed in Service after May 12, 1993: 39.Year Nonresidential Real Property Recovery The Applicable Percentage is (Use the Column for the Month in the First Year the Property Is Placed in Service): Yearts) 1 2 3 4 5 6 7 8 9 10 11 12 1 2.461 2.247 2,033 1,819 11605 1.391 1.177 0.963 0.749 0.535 0.321 0107 239 2.564 2564 2.564 2.54 2.504 2.564 2.564 2.564 21564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.749 0.963 1.1717 1.39) 1.605 1.819 2.033 2.247 2.461 The official tables contain a separate row for each year. For ease of presentation, certain year's are rouped in these tables. In some instances, this will produce a difference of.001 for the last digit whe ommared with the official tables, Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 2 3 4 5 6 7 8 10 11 12 1 3.485 3.182 2.879 2.576 2.273 1.970 1.667 1.364 1.061 0.758 0.45$ 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 19-27 3.637 3,637 3.637 3,637 3.637 3.637 3.637 3.637 3.637 3.637 3,632 37637 28 1.970 2.273 2.576 2.879 3.182 3.485 3,636 3.636 3.636 3.636 3.636 29 0.000 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1:364 1.667 0.152 2-18 3636 3.636 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 1 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.125 3125 3.175 3.175 3.175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.124 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0661 0.926 1.455 3.175 3.175 For Property Placed in Service after May 12, 1993: 39.Year Nonresidential Real Property Recovery The Applicable Percentage is (Use the Column for the Month in the First Year the Property Is Placed in Service): Yearts) 1 2 3 4 5 6 7 8 9 10 11 12 1 2.461 2.247 2,033 1,819 11605 1.391 1.177 0.963 0.749 0.535 0.321 0107 239 2.564 2564 2.564 2.54 2.504 2.564 2.564 2.564 21564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.749 0.963 1.1717 1.39) 1.605 1.819 2.033 2.247 2.461 The official tables contain a separate row for each year. For ease of presentation, certain year's are rouped in these tables. In some instances, this will produce a difference of.001 for the last digit whe ommared with the official tables

Question

On July 15, 2017 Zion Company acquired a motel for $460,000 (with $20,000 being allocated to the land). The straight-line cost recovery method was used. The property was sold on March 29, 2020, for $450,000.

Click here to access the Exhibit for MACRS Straight-Line Depreciation for Real Property.

If an amount is zero, enter "0". Do not round cost recovery factors. Round the total cost recovery deduction to the nearest dollar.

a. Compute the cost recovery and adjusted basis for the building. The cost recovery is $fill in the blank 016d93f9f070046_1, and the adjusted basis for the motel is $fill in the blank 016d93f9f070046_2.

b. What are the amount and nature of Zion's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured 1250 gain? There is $fill in the blank 6fac1b06cfc8f93_1 of recognized on the sale of the property, of which $fill in the blank 6fac1b06cfc8f93_3 is subject to 1250 recapture.

image text in transcribed

Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 2 3 4 5 6 7 8 10 11 12 1 3.485 3.182 2.879 2.576 2.273 1.970 1.667 1.364 1.061 0.758 0.45$ 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 19-27 3.637 3,637 3.637 3,637 3.637 3.637 3.637 3.637 3.637 3.637 3,632 37637 28 1.970 2.273 2.576 2.879 3.182 3.485 3,636 3.636 3.636 3.636 3.636 29 0.000 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1:364 1.667 0.152 2-18 3636 3.636 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 1 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.125 3125 3.175 3.175 3.175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.124 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0661 0.926 1.455 3.175 3.175 For Property Placed in Service after May 12, 1993: 39.Year Nonresidential Real Property Recovery The Applicable Percentage is (Use the Column for the Month in the First Year the Property Is Placed in Service): Yearts) 1 2 3 4 5 6 7 8 9 10 11 12 1 2.461 2.247 2,033 1,819 11605 1.391 1.177 0.963 0.749 0.535 0.321 0107 239 2.564 2564 2.564 2.54 2.504 2.564 2.564 2.564 21564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.749 0.963 1.1717 1.39) 1.605 1.819 2.033 2.247 2.461 The official tables contain a separate row for each year. For ease of presentation, certain year's are rouped in these tables. In some instances, this will produce a difference of.001 for the last digit whe ommared with the official tables, Exhibit 8.8 MACRS Straight-Line Depreciation for Real Property Assuming Mid-Month Convention* (Percentage Rates) For Property Placed in Service after December 31, 1986: 27.5-Year Residential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 2 3 4 5 6 7 8 10 11 12 1 3.485 3.182 2.879 2.576 2.273 1.970 1.667 1.364 1.061 0.758 0.45$ 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 3.636 19-27 3.637 3,637 3.637 3,637 3.637 3.637 3.637 3.637 3.637 3.637 3,632 37637 28 1.970 2.273 2.576 2.879 3.182 3.485 3,636 3.636 3.636 3.636 3.636 29 0.000 0.000 0.000 0.000 0.000 0.000 0.152 0.455 0.758 1.061 1:364 1.667 0.152 2-18 3636 3.636 For Property Placed in Service after December 31, 1986, and before May 13, 1993: 31.5-Year Nonresidential Real Property Recovery The Applicable Percentage Is (Use the Column for the Month in the First Year the Property is placed in Service); Year(s) 1 2 3 4 5 6 7 8 9 10 11 12 1 3.042 2.778 2.513 2.249 1.984 1.720 1.455 1.190 0.926 0.661 0.397 0.132 2-19 3.175 3.175 3.175 3.175 3.175 3.125 3125 3.175 3.175 3.175 3.175 20-31 3.174 3.174 3.174 3.174 3.174 3.124 3.174 3.174 3.174 3.174 3.174 3.174 32 1.720 1.984 2.249 2.513 2.778 3.042 3.175 3.175 3.175 3.175 3.175 33 0.000 0.000 0.000 0.000 0.000 0.132 0.397 0661 0.926 1.455 3.175 3.175 For Property Placed in Service after May 12, 1993: 39.Year Nonresidential Real Property Recovery The Applicable Percentage is (Use the Column for the Month in the First Year the Property Is Placed in Service): Yearts) 1 2 3 4 5 6 7 8 9 10 11 12 1 2.461 2.247 2,033 1,819 11605 1.391 1.177 0.963 0.749 0.535 0.321 0107 239 2.564 2564 2.564 2.54 2.504 2.564 2.564 2.564 21564 2.564 2.564 2.564 40 0.107 0.321 0.535 0.749 0.963 1.1717 1.39) 1.605 1.819 2.033 2.247 2.461 The official tables contain a separate row for each year. For ease of presentation, certain year's are rouped in these tables. In some instances, this will produce a difference of.001 for the last digit whe ommared with the official tables

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On July 15, 2017 Zion Company acquired a motel for $460,000 (with $20,000 being allocated to the land). The straight-line cost recovery method was used.

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