Copper Industries (a sole proprietorship) sold three 1231 assets during 2015. Da
ID: 2457105 • Letter: C
Question
Copper Industries (a sole proprietorship) sold three 1231 assets during 2015.
Data on these property dispositions are as follows:
Asset Cost Acquired Depreciation Sold for Sold on
Rack $110,000 10/10/12 $70,000 $55,000 10/10/15
Forklift 45,000 10/16/11 21,000 15,000 10/10/15
Bin 97,000 03/12/14 31,000 60,000 10/10/15
a. Determine for each asset a gain or loss and the amount of gain or loss ; The recapture amount: and the Balance of the gain/loss.
B. Copper has ( ?$?) of ( ordinary income / long-term capital gains) due to § 1245 recapture (?$) of § 1231(gain/loss)
C) Assuming that Copper has $6,000 nonrecaptured net 1231 losses from prior years, how much of the 2015 recognized gains is treated as capital gains?
Explanation / Answer
Determine for each asset a gain or loss and the amount of gain or loss ; The recapture amount: and the Balance of the gain/loss.
Details
ASSETS
Rack
Forklift
Bin
Date of Acquisition
10/10/2012`
10/16/2011
03/12/2014
Cost of Acquisition
$ 110,000
$45,000
$97,000
Depreciation
$ 70,000
$ 21000
$ 31,000
Cost after Deprciation
$ 40,000
$ 24,000
$ 66,000
Selling Price
$ 55,000
$ 15,000
$ 60,000
Gain/Loss
$ 15,000
$ -9000
$ -6000
Gain/loss
Gain
Loss
Loss
Part B & C of the question is not very Clear and uses the phrases like "
Copper has ( ?$?) of ( ordinary income / long-term capital gains) due to § 1245 recapture (?$) of § 1231(gain/loss)
C) Assuming that Copper has $6,000 nonrecaptured net 1231 losses from prior years, how much of the 2015 recognized gains is treated as capital gains?" which is hard to understand.
"
Details
ASSETS
Rack
Forklift
Bin
Date of Acquisition
10/10/2012`
10/16/2011
03/12/2014
Cost of Acquisition
$ 110,000
$45,000
$97,000
Depreciation
$ 70,000
$ 21000
$ 31,000
Cost after Deprciation
$ 40,000
$ 24,000
$ 66,000
Selling Price
$ 55,000
$ 15,000
$ 60,000
Gain/Loss
$ 15,000
$ -9000
$ -6000
Gain/loss
Gain
Loss
Loss
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