Vidal Industries (a sole proprietorship) sold three § 1231 assets during 2015. D
ID: 2497707 • Letter: V
Question
Vidal 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
Machine #56
$540,000
03/17/11
$225,000
$300,000
05/20/15
Machine #77
$425,000
06/03/12
$215,000
$265,000
05/20/15
Machine #101
$680,000
01/30/14
$385,000
$400,000
05/20/15
Determine the amount and the character of the recognized gain or loss from the disposition of each asset.
If an amount is zero, enter 0.
Asset
Character of
Gain or Loss
Total
Amount of
Gain or Loss
Amount of
§ 1245
Recapture
Balance of
Gain or Loss
Machine #56
Machine #77
Machine #101
Vidal has $________ of Select: (ordinary income, long-term capital gain) due to § 1245 recapture and $_______ of §1231 Select: (loss or gain).
Assuming Vidal has no non recaptured net § 1231 losses from prior years, the amount of 2015 recognized gains treated as capital gains is $__________ .
Note:
Select for line {character of Gain or loss}
§1231 loss
Long-term capital gain
Ordinary income
Asset
Cost
Acquired
Depreciation
Sold For
Sold On
Machine #56
$540,000
03/17/11
$225,000
$300,000
05/20/15
Machine #77
$425,000
06/03/12
$215,000
$265,000
05/20/15
Machine #101
$680,000
01/30/14
$385,000
$400,000
05/20/15
Explanation / Answer
Vidal has $160,000 of ordianyr income due to sec 1245 recapture and $15,000 of sec 1231 loss
Assuming Vidal has no non recaptured net § 1231 losses from prior years, the amount of 2015 recognized gains treated as capital gains is $___0_______ .
Assets Character of gain or loss total amount of gain or loss Amount of sec1245 recapture balance of gain or loss Machine#56 sec1231 loss 15,000 0 15,000 Machine #77 ordinary income 55,000 55,000 0 Machine#101 Ordinary income 105,000 105,000 0Related Questions
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