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WAR (We Are Rich) has been in business since 1986. WAR is an accrual method sole proprietorship that deals in the manufacturing and wholesaling of various types of golf equipment. Hack & Hack CPAs has filed accurate tax returns for WAR's owner since WAR opened its doors. The managing partner of Hack & Hack (Jack) has gotten along very well with the owner of WAR-Mr. Someday Woods (single). However, in early 2019. Jack Hack and Someday Woods played a round of golf and Jack, for the first time ever, actually beat Mr. Woods. Mr. Woods was so upset that he fired Hack & Hack and has hired you to compute his 2019 taxable income. Mr. Woods was able to provide you with the following information from prior tax returns. The taxable income numbers reflect the results from all of Mr. Wood's activities except for the items separately stated. You will need to consider how to handle the separately stated items for tax purposes. Also, note that the 2014-2018 numbers do not reflect capital loss carryovers. 2014 $4,000 2015 2016 2017 2018 $2,000 $94.000 $170,000 $250,000 Ordinary taxable income Other items not included in ordinary taxable income: Net gain (loss) on disposition of $1231 assets Net long-term capital gain (loss) on disposition of capital assets $3,000 10,000 $(6,000 $(15,000 $1,000 $17.000) ) $(7.000 ) In 2019, Mr. Woods had taxable income in the amount of $480,000 before considering the following events and transactions that transpired in 2019: a. On January 1, 2019, WAR purchased a plot of land for $100,000 with the intention of creating a driving range where patrons could test their new golf equipment. WAR never got around to building the driving range, instead, WAR sold the land on October 1, 2019, for $40,000. b. On August 17, 2019, WAR sold its golf testing machine, "Iron Byron" and replaced it with a new machine Iron Tiger." "Iron Byron" was purchased and installed for a total cost of $22.000 on February 5, 2015. At the time of sale, Iron Byron' had an adjusted tax basis of $4,000. WAR sold iron Byron" for $25,000 c. In the months October through December 2019, WAR sold various assets to come up with the funds necessary to invest in WAR's latest and greatest invention-the three-dimple golf ball. Data on these assets are provided below: Asset Placed in Service (or purchased) Sold Initial Basis Accumulated Depreciation Selling Price Someday's black leather sofa (used in office) 4/4/18 10/16/19 $3,000 $540 $ 2,900 Someday's office chair 3/1/17 11/8/198,000 3,000 4,000 Marketable securities 2/1/16 12/1/1912,000 0 20.000 Land held for investment 7/1/18 11/29/1945,0000 48.000 Other investment property 11/30/17 10/15/1910,0000 8,000 d. Finally, on May 7, 2019, WAR decided to sell the building where it tested its plutonium shaft, lignite head drivers. WAR purchased the building on January 5, 2007, for $190,000 ($170,000 for the building. $20,000 for the land). At the time of the sale, the accumulated depreciation on the building was $50,000. WAR sold the building (with the land) for $300,000. The fair market value of the land at the time of sale was $45,000. (Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Loss amounts should be indicated by a minus sign.) Compute Mr. Woods's taxable income after taking into account the transactions described above. o the WIR We Are Rich has been in business since 1906. WARS anal method manufacturing and Wholesaling of various types of act & CPA WAR's owner since WAR opened is doors. The managing part of owner of WARSomeday Woods . However 2012 and So golf and Jack for the first time every bear Wood Woodwor hired you to computers 2019 income, Woodw od you us. The incomembers t o o Woods You need to consider how to handle the numbers do not reflect loss carryovers u d the nd of s or 2014-2018 $4.000 52.000 53.00 120.000 income N Ordinary income Oteroide ry ow of 231 Netlog o n 300 $39000 $15.000 $ 1 5 .7300) 300 In 2012 W ade come in the amount of $40.000 b ong the On January 2012 Rudadagoland 500.000 do parosco w golfoon. W e got and building the the land on O ber 2013. for $40.000 Os 17. 2018. go d ina on Boa rd and s tora 22.000 2015. Botha WR 25.000 the mo ther 2018 WAR in Wendente traballo The m e Seling Price Asset Placed in Service for purchased So o Someday's black leather sale dino 191819 $3.500 Someday sofice chair 3117 11819 000 Marwater 12119 12.000 Landheld for investment 7/1/18 11129/19450000 Other investment property 11/30/17 10/15/9 10 000 5 000 200 4.000 20.000 2016 000 e Finally, on May 7, 2018 WAR cd to sell the building where tested pu purchased the building on January 2007 for $150.000 0.000 for the building 20.000 sale, the counted depreciation on the building was $50.000 Rothe buiding market value of the land of the time of was $45.000. De otround to the nearest whole dollar amount Loss amounts should be indicated by the do WAR theme of the $300.000 The Round your final Compute Mr Woods's ble income for taking into account the transactions described above WAR (We Are Rich) has been in business since 1986. WAR is an accrual method sole proprietorship that deals in the manufacturing and wholesaling of various types of golf equipment. Hack & Hack CPAs has filed accurate tax returns for WAR's owner since WAR opened its doors. The managing partner of Hack & Hack (Jack) has gotten along very well with the owner of WAR-Mr. Someday Woods (single). However, in early 2019. Jack Hack and Someday Woods played a round of golf and Jack, for the first time ever, actually beat Mr. Woods. Mr. Woods was so upset that he fired Hack & Hack and has hired you to compute his 2019 taxable income. Mr. Woods was able to provide you with the following information from prior tax returns. The taxable income numbers reflect the results from all of Mr. Wood's activities except for the items separately stated. You will need to consider how to handle the separately stated items for tax purposes. Also, note that the 2014-2018 numbers do not reflect capital loss carryovers. 2014 $4,000 2015 2016 2017 2018 $2,000 $94.000 $170,000 $250,000 Ordinary taxable income Other items not included in ordinary taxable income: Net gain (loss) on disposition of $1231 assets Net long-term capital gain (loss) on disposition of capital assets $3,000 10,000 $(6,000 $(15,000 $1,000 $17.000) ) $(7.000 ) In 2019, Mr. Woods had taxable income in the amount of $480,000 before considering the following events and transactions that transpired in 2019: a. On January 1, 2019, WAR purchased a plot of land for $100,000 with the intention of creating a driving range where patrons could test their new golf equipment. WAR never got around to building the driving range, instead, WAR sold the land on October 1, 2019, for $40,000. b. On August 17, 2019, WAR sold its golf testing machine, "Iron Byron" and replaced it with a new machine Iron Tiger." "Iron Byron" was purchased and installed for a total cost of $22.000 on February 5, 2015. At the time of sale, Iron Byron' had an adjusted tax basis of $4,000. WAR sold iron Byron" for $25,000 c. In the months October through December 2019, WAR sold various assets to come up with the funds necessary to invest in WAR's latest and greatest invention-the three-dimple golf ball. Data on these assets are provided below: Asset Placed in Service (or purchased) Sold Initial Basis Accumulated Depreciation Selling Price Someday's black leather sofa (used in office) 4/4/18 10/16/19 $3,000 $540 $ 2,900 Someday's office chair 3/1/17 11/8/198,000 3,000 4,000 Marketable securities 2/1/16 12/1/1912,000 0 20.000 Land held for investment 7/1/18 11/29/1945,0000 48.000 Other investment property 11/30/17 10/15/1910,0000 8,000 d. Finally, on May 7, 2019, WAR decided to sell the building where it tested its plutonium shaft, lignite head drivers. WAR purchased the building on January 5, 2007, for $190,000 ($170,000 for the building. $20,000 for the land). At the time of the sale, the accumulated depreciation on the building was $50,000. WAR sold the building (with the land) for $300,000. The fair market value of the land at the time of sale was $45,000. (Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Loss amounts should be indicated by a minus sign.) Compute Mr. Woods's taxable income after taking into account the transactions described above. o the WIR We Are Rich has been in business since 1906. WARS anal method manufacturing and Wholesaling of various types of act & CPA WAR's owner since WAR opened is doors. The managing part of owner of WARSomeday Woods . However 2012 and So golf and Jack for the first time every bear Wood Woodwor hired you to computers 2019 income, Woodw od you us. The incomembers t o o Woods You need to consider how to handle the numbers do not reflect loss carryovers u d the nd of s or 2014-2018 $4.000 52.000 53.00 120.000 income N Ordinary income Oteroide ry ow of 231 Netlog o n 300 $39000 $15.000 $ 1 5 .7300) 300 In 2012 W ade come in the amount of $40.000 b ong the On January 2012 Rudadagoland 500.000 do parosco w golfoon. W e got and building the the land on O ber 2013. for $40.000 Os 17. 2018. go d ina on Boa rd and s tora 22.000 2015. Botha WR 25.000 the mo ther 2018 WAR in Wendente traballo The m e Seling Price Asset Placed in Service for purchased So o Someday's black leather sale dino 191819 $3.500 Someday sofice chair 3117 11819 000 Marwater 12119 12.000 Landheld for investment 7/1/18 11129/19450000 Other investment property 11/30/17 10/15/9 10 000 5 000 200 4.000 20.000 2016 000 e Finally, on May 7, 2018 WAR cd to sell the building where tested pu purchased the building on January 2007 for $150.000 0.000 for the building 20.000 sale, the counted depreciation on the building was $50.000 Rothe buiding market value of the land of the time of was $45.000. De otround to the nearest whole dollar amount Loss amounts should be indicated by the do WAR theme of the $300.000 The Round your final Compute Mr Woods's ble income for taking into account the transactions described above