Question

Question: In year 1, DEF recognized a loss of $15,000 on land that it had held...

Question:

In year 1, DEF recognized a loss of $15,000 on land that it had held for investment. It also recognized a $20,000 gain on equipment it had purchased a few years ago. The equipment sold for $50,000 and had an adjusted basis of $30,000. DEF had deducted $15,000 of tax depreciation on the equipment.

Answer:

Book Tax Difference Favorable / Unfavorable Permanent / Temporary
Year 1 $10,000 Unfavorable Temporary
Year 2 $0 Not Applicable Not Applicable

This is the answer but I don't know how they got this. Please explain and show all work.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Al received a parcel of land from his Uncle Ed as a gift. Ed had purchased...
Al received a parcel of land from his Uncle Ed as a gift. Ed had purchased the land for $400000 in 2015. Al sold the land for $480,000 the day after he got it. The terms of the sale were $50,000 cash, inventory worth 30,000 and a small warehouse with a fair value of $400,000. The cash is to be paid in equal annual installments of $10,000 for 5 years. The inventory will be delivered next year around June The...
On June 1 of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of...
On June 1 of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of another business in a taxable acquisition. When the purchase price was allocated to the assets purchased, RC determined it had purchased $1,800,000 of goodwill for both book and tax purposes. At the end of year 1, RC determined that the goodwill had not been impaired during the year. In year 2, however, RC concluded that $390,000 of the goodwill had been impaired and wrote...
On July of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of another...
On July of year 1, Riverside Corp. (RC), a calendar-year taxpayer, acquired the assets of another business in a taxable acquisition. When the purchase price was allocated to the assets purchased, RC determined it had purchased $2,040,000 of goodwill for both book and tax purposes. At the end of year 1, RC determined that the goodwill had not been impaired during the year. In year 2, however, RC concluded that $405,000 of the goodwill had been impaired wrote down the...
Corgill Corporation sold land that it used for storing old equipment. Corgill owned the land for...
Corgill Corporation sold land that it used for storing old equipment. Corgill owned the land for seven years and it had a basis of $234,000. Corgill received $50,000 cash and a note for $100,000 and the purchaser assumed Corgill’s $150,000 mortgage on the property. Corgill also paid a realtor’s fee of $15,000 and other selling expenses of $2,000. What is Corgill’s Recognized gain or loss on the sale and what is its character? B. If Corgill had held the land...
Robinson Company had a net deferred tax liability of $34,476 at the beginning of the year,...
Robinson Company had a net deferred tax liability of $34,476 at the beginning of the year, representing a net taxable temporary difference of $101,400 (taxed at 34%). During the year, Robinson reported pretax book income of $401,400. Included in the computation were favorable temporary differences of $51,400 and unfavorable temporary differences of $20,700. During the year, Congress reduced the corporate tax rate  from 34% to 21%. Robinson's deferred income tax expense or benefit for the current year would be: Net deferred...
In Year 1 Eukalade and Isonoe formed Middle Moons Partnership ·       Eukalade contributed land with an adjusted...
In Year 1 Eukalade and Isonoe formed Middle Moons Partnership ·       Eukalade contributed land with an adjusted basis of $146,000 and a fair market value of $119,000. The land was capital in nature to Eukalade and held as a capital asset by the partnership. ·       Isonoe contributed depreciable equipment with an adjusted basis of $251,000 and a fair market value of $194,000. The equipment was capital in nature to Isonoe and held as a capital asset by the partnership ·       Eukalade had a...
1.- Determine the overall income or loss of STA Ltd, a publicly traded partnership, given the...
1.- Determine the overall income or loss of STA Ltd, a publicly traded partnership, given the following current-year amounts: $6,000 income, $2,500 in deductions, and $650 prior-year unallowed losses. A.- $650 gain. B.- $2,500 gain. C.- $2,850 gain. D.- $6,000 gain. 2.- How should a partner's passive loss, passive income, nonpassive loss and nonpassive income be categorized or identified on the partner's Schedule K-1 (Form 1065)? A.- Guaranteed payments. B.- Net rental real income (loss). C.- Ordinary Business income (loss)...
Comprehensive Problem Jason and Jill are married and have a six-year-old daughter. During the year they...
Comprehensive Problem Jason and Jill are married and have a six-year-old daughter. During the year they sell one acre of land for $80,000. Three years ago, they paid $70,000 for two acres of land. Their other income and deductions are as follows: Jason’s salary                                                            $ 150,000 Jill’s commissions                                                      82,950 Interest income                                                             8,000 Dividend income (qualifying dividends)                                5,000 Short-term loss on sale of stock in Nippon Inc.                     (15,000) Deductions for adjusted gross income    ...
1) Ed has a 25% marginal tax rate and has already recognized a STCL of $16,000...
1) Ed has a 25% marginal tax rate and has already recognized a STCL of $16,000 and a LTCG of $9,000, both due to the sale of stock. He is considering the sale of an antique clock held for investment that would result in an $11,000 LTCG. What is the increase in his tax liability if he goes ahead with the proposed transaction this year? a. $3,080 b. $ 600 c. $2,950 d. $2,350 e. None of the answers provided...
In January of the current year, Wanda transferred machinery worth $200,000 (basis of $30,000) to a...
In January of the current year, Wanda transferred machinery worth $200,000 (basis of $30,000) to a controlled corporation, Oriole, Inc., in a transfer that qualified under § 351. Wanda had deducted depreciation on the machinery in the amount of $165,000 when she held the machinery for use in her proprietorship. Later during the year, Oriole sells the machinery for $190,000. Answer the following questions regarding the tax consequences to Wanda and to Oriole on the sale of the machinery. a....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT