Sally Slugger owns and operates a baseball bat manufacturing business named Field of Dreams. Field of Dreams has manufacturing facilities in several states and it manufactures and sells baseball bats to major league baseball teams, college and high school baseball teams across the country. Sally has decided to consolidate operations and Field of Dreams completed the sale of a facility in lowa. In June of 2020, Field of Dreams, NOT A CORPORATION, sold the following assets: Sales Price Original Cost Accumulated Depreciation 5 acres of land Factory building Machines and equipment Baseball bats $2,000,000 $3,500,000 $1,000,000 $500,000 $1,200,000 $3,000,000 $2,000,000 $450,000 $500,000 $1,600,000 The lowa facility was acquired and placed in service in 2014. In 2018, Field of Dreams sold land that it used as a parking lot for trucks used to transport baseball bats to its customers. The land was sold for $100,000. The land was purchased in 2008 for $400,000. In 2020, Sally sold the following securities and assets: Acquired Sold Sales Price Purchase Price $70,000 100 shares XYZ 2020 2020 $80,000 150 shares ABC 2018 2020 200 shares Pear Corp 2017 2020 $130,000 $200,000 $3,000 $150,000 $130,000 $5,000 Personal snowmobile 2018 2020 Field of Dreams income or loss is reported on Sally's income tax return. Assume Sally's marginal tax rate is 35%. Please calculate how much federal income tax Sally will owe on the above described transactions. For partial credit, you should identify how each of these transactions will be treated for income tax purposes (short term capital gain, long term capital gain, short term or long term capital loss, Sec 1231 gain, Sec 1245 gain, unrecaptured Sec 1250 gain, ordinary gain or loss). Sally Slugger owns and operates a baseball bat manufacturing business named Field of Dreams. Field of Dreams has manufacturing facilities in several states and it manufactures and sells baseball bats to major league baseball teams, college and high school baseball teams across the country. Sally has decided to consolidate operations and Field of Dreams completed the sale of a facility in lowa. In June of 2020, Field of Dreams, NOT A CORPORATION, sold the following assets: Sales Price Original Cost Accumulated Depreciation 5 acres of land Factory building Machines and equipment Baseball bats $2,000,000 $3,500,000 $1,000,000 $500,000 $1,200,000 $3,000,000 $2,000,000 $450,000 $500,000 $1,600,000 The lowa facility was acquired and placed in service in 2014. In 2018, Field of Dreams sold land that it used as a parking lot for trucks used to transport baseball bats to its customers. The land was sold for $100,000. The land was purchased in 2008 for $400,000. In 2020, Sally sold the following securities and assets: Acquired Sold Sales Price Purchase Price $70,000 100 shares XYZ 2020 2020 $80,000 150 shares ABC 2018 2020 200 shares Pear Corp 2017 2020 $130,000 $200,000 $3,000 $150,000 $130,000 $5,000 Personal snowmobile 2018 2020 Field of Dreams income or loss is reported on Sally's income tax return. Assume Sally's marginal tax rate is 35%. Please calculate how much federal income tax Sally will owe on the above described transactions. For partial credit, you should identify how each of these transactions will be treated for income tax purposes (short term capital gain, long term capital gain, short term or long term capital loss, Sec 1231 gain, Sec 1245 gain, unrecaptured Sec 1250 gain, ordinary gain or loss)
