TAX ACCOUNTING

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Paul, whose tax rate is 32%, sells each of the following assets for $230,000. Each case is an independent case. Reference i More Info Single The tax is: If taxable income is 10% of taxable income. 1. Building purchased in 2003 for $240,000 with adjusted basis of $175,000 2. Equipment purchased in 2015 for $295,000 with adjusted basis of $129,000 3. Land purchased in 1996 for $55,000 to use as a building site. 4. Building purchased in 2002 for $190,000 with adjusted basis of $137,000. 5. Equipment purchased in 2016 for $195,000 with adjusted basis of $150,000. Not over $9,700 Over $9,700 but not over $39,475 Over $39,475 but not over $84,200 Over $84,200 but not over $160,725 Over $160,725 but not over $204,100 Over $204,100 but not over $510,300 Over $510,300 $970.00 + 12% of the excess over $9,700. $4,543.00 + 22% of the excess over $39,475. . $14,382.50 +24% of the excess over $84,200. . $32,748.50 + 32% of the excess over $160,725. ... $46,628.50 + 35% of the excess over $204, 100. . $153,798.50 + 37% of the excess over $510,300. Print Done Done Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: Print Ordinary income tax rates (up to 37% in 2019) for gains on assets held one year or less 28% rate on collectibles gains and includible Sec. 1202 gains Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: Preferential Rate Single Filing Jointly* Head of Household 0% Up to $39,375 Up to $78,750 Up to $52.750 15% > $39,375 but not over $434,550 > $78,750 but not over $488,850 > $52,750 but not over $461,700 20% Over $434,550 Over $488,850 Over $461,700 * The corresponding amounts if married filing separately are half of the amounts for filing jointly. The preferential rate is zero for taxable income up to $39,375 if married filing separately. Sec. 1231 Gain (Loss) Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% Building purchased in 2003 for $240,000 with adjusted basis of $195,000 $ $ Sec. 1231 Gain (Loss) Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% Equipment purchased in 2015 for $315,000 with adjusted basis of $164,000 Sec. 1231 Gain (Loss) Ordinary Income Taxed at 32% Taxed at 25% Taxed at 20% Taxed at 15% Land purchased in 1996 for $75,000 to use as a building site $ $ Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% $ $ Sec. 1231 Gain (Loss) Building purchased in 2002 for $160,000 with adjusted basis of $142,000 $ Sec. 1231 Gain (Loss) Equipment purchased in 2016 for $190,000 with adjusted basis of $145,000 $ Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% $ $ $ Paul, whose tax rate is 32%, sells each of the following assets for $230,000. Each case is an independent case. Reference i More Info Single The tax is: If taxable income is 10% of taxable income. 1. Building purchased in 2003 for $240,000 with adjusted basis of $175,000 2. Equipment purchased in 2015 for $295,000 with adjusted basis of $129,000 3. Land purchased in 1996 for $55,000 to use as a building site. 4. Building purchased in 2002 for $190,000 with adjusted basis of $137,000. 5. Equipment purchased in 2016 for $195,000 with adjusted basis of $150,000. Not over $9,700 Over $9,700 but not over $39,475 Over $39,475 but not over $84,200 Over $84,200 but not over $160,725 Over $160,725 but not over $204,100 Over $204,100 but not over $510,300 Over $510,300 $970.00 + 12% of the excess over $9,700. $4,543.00 + 22% of the excess over $39,475. . $14,382.50 +24% of the excess over $84,200. . $32,748.50 + 32% of the excess over $160,725. ... $46,628.50 + 35% of the excess over $204, 100. . $153,798.50 + 37% of the excess over $510,300. Print Done Done Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: Print Ordinary income tax rates (up to 37% in 2019) for gains on assets held one year or less 28% rate on collectibles gains and includible Sec. 1202 gains Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: Preferential Rate Single Filing Jointly* Head of Household 0% Up to $39,375 Up to $78,750 Up to $52.750 15% > $39,375 but not over $434,550 > $78,750 but not over $488,850 > $52,750 but not over $461,700 20% Over $434,550 Over $488,850 Over $461,700 * The corresponding amounts if married filing separately are half of the amounts for filing jointly. The preferential rate is zero for taxable income up to $39,375 if married filing separately. Sec. 1231 Gain (Loss) Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% Building purchased in 2003 for $240,000 with adjusted basis of $195,000 $ $ Sec. 1231 Gain (Loss) Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% Equipment purchased in 2015 for $315,000 with adjusted basis of $164,000 Sec. 1231 Gain (Loss) Ordinary Income Taxed at 32% Taxed at 25% Taxed at 20% Taxed at 15% Land purchased in 1996 for $75,000 to use as a building site $ $ Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% $ $ Sec. 1231 Gain (Loss) Building purchased in 2002 for $160,000 with adjusted basis of $142,000 $ Sec. 1231 Gain (Loss) Equipment purchased in 2016 for $190,000 with adjusted basis of $145,000 $ Taxed at 20% Ordinary Income Taxed at 32% Taxed at 25% Taxed at 15% $ $ $