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Comprehensive Problem 11-71 (LO 11-1, LO 11-2, LO 11-3, LO 11-4, LO 11-5, LO 11-6) (Algo)

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Moab Incorporated manufactures and distributes high-tech biking gadgets. It has decided to streamline some of its operations so that it will be able to be more productive and efficient. Because of this decision it has entered into several transactions during the year.

1. Moab Incorporated sold a machine that it used to make computerized gadgets for $29,700 cash. It originally bought the machine for $20,800 three years ago and has taken $8,000 in depreciation.
2. Moab Incorporated held stock in ABC Corporation, which had a value of $20,000 at the beginning of the year. That same stock had a value of $23,230 at the end of the year.
3. Moab Incorporated sold some of its inventory for $8,600 cash. This inventory had a basis of $5,000.
4. Moab Incorporated disposed of an office building with a fair market value of $83,000 for another office building with a fair market value of $61,400 and $21,600 in cash. It originally bought the office building seven years ago for $70,000 and has taken $15,000 in depreciation.
5. Moab Incorporated sold some land held for investment for $44,000. It originally bought the land for $45,800 two years ago.
6. Moab Incorporated sold another machine for a note payable in four annual installments of $16,000. The first payment was received in the current year. It originally bought the machine two years ago for $48,000 and has claimed $9,800 in depreciation expense against the machine.
7. Moab Incorporated sold stock it held for eight years for $3,550. It originally purchased the stock for $2,500.
8. Moab Incorporated sold another machine for $8,900. It originally purchased this machine six months ago for $9,600 and has claimed $530 in depreciation expense against the asset.

Required: 1. Determine the gain/loss realized and recognized in the current year for each of these events provided above. Also determine whether the gain/loss recognized will be $1231, capital, or ordinary. 2. From the recognized gains/losses determined in part 1 , determine the net $1231 gain/loss, the net ordinary gain/loss, and the net capital gain/loss Moab will recognize on its tax return. Moab Incorporated also has $3,600 of nonrecaptured net $1231 losses from previous years. Complete this question by entering your answers in the tabs below. Determine the gain/loss realized and recognized in the current year for each of these events provided above. Also determine wheth gain/loss recognized will be $1231, capital, or ordinary. Note: Do not round intermediate computations. Loss amounts should be indicated by a minus sign. Complete this question by entering your answers in the tabs below. From the recognized gains/losses determined in part 1 , determine the net $1231 gain/loss, the net ordinary gain/loss, and the net capital gain/loss Moab will recognize on its tax return. Moab Incorporated also has $3,600 of nonrecaptured net 1231 losses from previous years. Note: Do not round intermediate computations. Loss amounts should be indicated by a minus sign. Amounts Under Sections 179 and 280F(b)(2) ) - Attach to your tax return. Go to www.irs.gow/Form4797 for instructions and the latest information. Name(s) shown on return 2021 Department of the Treasury Internal Revenue Service 1a Enier the gross proceeds from sales ar exchanges reported to you for 2021 on Form(s) 1099-8 or 1099-S (ar substitute statement) that you are including on line 2,10 , or 20 . See instructions b Enter the total amount of gain that you are including on lines 2, 10, and 24 due to the partial dispositions of MACRS assets c Enter the total amount of loss that you are including on lines 2 and 10 due to the partial dispositions of MACRS assets \begin{tabular}{|c|c|} \hline 1a & \\ \hline 1b & \\ \hline 1c & \\ \hline \end{tabular} Part I Sales or Exchanges of Property Used in a Trade or Business and Involuntary Conversions From Other Than Casualty or Theft-Most Property Held More Than 1 Year (see instructions) Part II Ordinary Gains and Losses (see instructions) 10 Ordinary gains and lasses not included on lines 11 through 16 (include property held 1 year or less)- Form 4797(2021) Page 2 Part III Gain From Disposition of Property Under Sections 1245, 1250, 1252, 1254, and 1255 (see instructions) 19 (a) Description of section 1245, 1250, 1252, 1254, or 1255 property: \begin{tabular}{|c|c|c|c|c|c|c|} \hline \multicolumn{5}{|c|}{19 (a) Description of section 1245, 1250, 1252, 1254, or 1255 property: } & \begin{tabular}{c} (b) Date acquired \\ (yyyy) \end{tabular} & \begin{tabular}{l} (c) Date sold \\ (yyyy) \end{tabular} \\ \hline \multicolumn{7}{|c|}{ A } \\ \hline \multicolumn{7}{|c|}{ B } \\ \hline \multicolumn{7}{|c|}{C} \\ \hline \multicolumn{7}{|c|}{ D } \\ \hline \multicolumn{3}{|c|}{ These columns relate to the properties on lines 19A through 190 . } & Property A & Property B & Property C & Property D \\ \hline \multirow{5}{*}{\multicolumn{2}{|c|}{\begin{tabular}{l} 20 Gross sales price (Note: See line 1 before completing.) \\ 21 Cost or ather basis plus expense of sale \\ 22 Depreciation (or depletion) allowed ar alowable \\ 23 Adjusted basis. Subtract line 22 from line 21 \\ 24 Total gain. Subtract fine 23 from line 20 \end{tabular}}} & 20 & 7 & & & \\ \hline & & 21 & & & & \\ \hline & & 22 & & & & \\ \hline & & 23 & 0 & & & \\ \hline & & 24 & 0 & & & \\ \hline \multicolumn{2}{|r|}{\begin{tabular}{l} Depreciation allowed or allowable from line 22 \\ Enter the smaller of line 24 or 25a \end{tabular}} & 25s & & & & \\ \hline \multicolumn{7}{|c|}{\begin{tabular}{l} 26 If section 1250 property: If straight line depreciation was used, \\ enter - 0 - on line 26g. except for a corporation subject to section \\ 291 . \end{tabular}} \\ \hline \multirow{2}{*}{\multicolumn{2}{|c|}{\begin{tabular}{l} a Additional depreciation after 1975 . see instructions. \\ b Applicable percentage mulfiplied by the smaler of line \end{tabular}}} & 26a & & & F & Y \\ \hline & & & & & & \\ \hline \multicolumn{2}{|r|}{24 or line 26 a. See instructions } & 26b & Y & & F & Y \\ \hline \multicolumn{2}{|r|}{\begin{tabular}{l} c Subtract line 26 fram line 24 . If residential rental property \\ or line 24 isn't more than line 26a, skip lines 26d and 26e \end{tabular}} & 26c & 7 & 7 & F & \\ \hline \multicolumn{2}{|r|}{ d Additional depreciation after 1969 and before 1976} & 26d & & & & Z \\ \hline \multicolumn{2}{|r|}{ e Enter the smaller of line 26c or 26d} & 26e & 7 & & & Z \\ \hline \multicolumn{2}{|r|}{ f Section 291 amount (corporations anly) } & 268 & 7 & & F & Y \\ \hline \multicolumn{2}{|r|}{ g Add lines 26b,26e, and 26f} & 26g & & & & \\ \hline \multicolumn{7}{|c|}{\begin{tabular}{l} 27 If section 1252 property: Skip this section if you didn't \\ dispose of farmland or if this form is being completed for \\ a partnership. \end{tabular}} \\ \hline \multicolumn{2}{|r|}{\begin{tabular}{l} a Soil, water, and land clearing expenses \\ b Line 27 a multiplied by applicable percentage. See instructions \\ c Enter the smaller of line 24 or 27b \end{tabular}} & 27c & 7 & & 7 & F \\ \hline & \begin{tabular}{l} 28 If section 1254 property: \\ Intangible driling and development costs, expenditures \\ for development of mines and ather natural deposits, \end{tabular} & & & & & \\ \hline & for development of mines and ather natural deposits, & 28a & Y & & Y & Y \\ \hline & Enter the smaller of line 24 or 28a & 286 & & & & Y \\ \hline \multicolumn{7}{|c|}{29 If section 1255 property: } \\ \hline & Applicable percentage of payments excluded from & & & & & \\ \hline & income under section 126. See instructions & 29a & 7 & & F & \\ \hline & Enter the smaller of line 24 or 29a. See instructions & 296 & 7 & & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|} \hline \multicolumn{4}{|c|}{\begin{tabular}{l} Complete property columns A through D through line 29b before going to line \\ 30 . \end{tabular}} \\ \hline \multicolumn{2}{|l|}{30 Tolal gains for all properties. A } & 30 & 0 \\ \hline \multicolumn{2}{|c|}{31 Add property columns A through D, lines 25b,26g,27c,28b, and 29b. Enter here and on line 13} & 31 & 0 \\ \hline \multicolumn{2}{|c|}{\begin{tabular}{l} 32 Subtract line 31 fram line 30 . Enter the portion from casualty or theft on Form 4684 , line 33 . Enter the portion from \\ ather than casualty or theft an Form 4797, line 6 \end{tabular}} & 32 & 0 \\ \hline \end{tabular}