Use $2023$ rules.

Be sure to identify each item$$s character. At the end of each amount that requires a character, you will have

$$ ordinary income or loss,

$$ capital gain or loss which is also short$-$term or long$-$term $($i$.$e$.$ STCG$,$ STCL$,$ LTCG$,$ or LTCL$),$ or

$1250$ unrecaptured gains.

Assume that problem lists all relevant transactions $($in other words, there is nothing else you need to net against$).$ When asked about $$What is the tax effect?$$ find a dollar amount and character $$ there may be more than one piece with different characters. Don$$t calculate the tax liability unless asked to do so$.$

$1.$ Sandra sold some equipment for $$12,275$ in cash, $$1,800$ of office products, the buyer's assumption of her $$2,300$ loan, and incurred selling expenses of $$1,600.$ What is Sandra's amount realized in the transaction?

$2.$Bull Run sold a computer for $$1,900$ on November $10$th of the current year. The computer was purchased for $$2,700$ two years ago. Bull Run had taken $$520$ of depreciation deductions and used the computer for normal business. What is the tax effect?

$3.$ Tim Bull, owner of Bull Run, sold his personal computer on November $10$th of the current year. The computer was purchased for $$3,800$ two years ago and he sold it for $$1,900.$ What is the tax effect?

$4.$Andrea sold a piece of machinery she used in her business for nine months. The amount realized was $$59,422,$ and the adjusted basis was $$41,000.$ What is the tax effect?

$5.$ Jessie sold a piece of land held for investment for $$450,000.$ Jessie bought the land two years ago for $$395,000.$ What is the tax effect?

$6.$Sunshine LLC sold furniture for $$75,000.$ Sunshine bought the furniture for $$81,799$ several years ago and has claimed $$25,000$ of depreciation expense on the furniture. What is the tax effect?

$7.$ Alexandra sold equipment that she uses in her business for $$190,000.$ Alexandra bought the equipment two years ago for $$185,450$ and has claimed $$10,000$ of depreciation expense. What is the tax effect? $($Note there are two pieces to this with different characters.$)$

$8.$Frederique sold furniture that she uses in her business for $$12,000.$ Frederique bought the furniture a few years ago for $$34,000$ and has claimed $$18,000$ of depreciation expense. What is the tax effect?

$9.$ Brandy sold a rental house that she owned for $$285,000.$ Brandy bought the house several years ago for $$140,000$ and has claimed $$18,000$ of depreciation expense. $($Note there are two pieces to this with different characters.$)$

What is the tax effect?

$10.$ Suzanne, an individual, began business four years ago. Assume Suzanne is a sole proprietor who files as a single taxpayer, and her current marginal tax rate is $32\%.$ Suzanne owned each of the assets for several years. In the current year, Suzanne sold the following business assets:

Asset Cost Dep. Gain $($loss$)$

Machinery $17,8507,6508,800$

Furniture $5,9501,700(1,300)$

Building $392,00087,11190,000$

What is the tax effect? What is the tax liability?

For this problem figure out the gain or loss and character$($s$)$ on each asset separately. Then net the amounts that have the same character so you have one amount in each character category. Then calculate the tax $($as different characters have different tax rates$)$ for each category and sum.

$11.$ Odintz traded land for land. Odintz originally purchased its land for $$370,000.$ The land Odintz received was purchased by the seller some years ago for $$200,000$ and was subject to a mortgage of $$50,000$ that the seller paid off before the transfer. The fair market value of the new land is $$340,000.$ What is Odintz's adjusted basis in the new land after the exchange?

$12.$ Misha traded computer equipment used in her business to a computer dealer for some new computer equipment. Misha originally purchased the computer equipment several years ago for $$19,000,$ and it had an adjusted basis of $$12,000$ and a FMV of $$14,000$ at the time of the exchange. The new computer equipment has a FMV of $$15,000.$ Misha also received a used copier worth $$1,375$ in the transaction. What is Misha's realized and recognized gain$/$loss on the exchange? What is her basis in the new computer? In the copier?