Question
Ruthanne Jefferson is a wealthy retired woman. She sold an oil painting for $25,000 this year. She originally had purchased this painting for $10,000 over
Ruthanne Jefferson is a wealthy retired woman. She sold an oil painting for $25,000 this year. She originally had purchased this painting for $10,000 over a decade ago. Before selling this painting, she always got great pleasure of viewing this painting when it hung about her living room coach. Ruth has over $1 million of salary income from other sources. 13. What amount and type of gain, if any, does she have to recognize on her current-year tax return? 14. What amount of tax liability, if any, does Ruthanne incur on this sale? Refer to the information above. Assume instead that Ruthanne is an art dealer who owns an art gallery in Beverly Hills. For the past two years, this painting has been hanging on the wall of her art gallery, not in her home. 15. Does Ruthanne have to recognize depreciation recapture income on the sale of this painting? State "yes" or no," and explain. 16. By how much does this sale increase her tax liability for the year
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