Question

Sam, a calendar year taxpayer sold 2 Section 1231 assets during the year.  He had $5,000 of non-recaptured net Section 1231 losses from 3 years ago.  What is the amount and character of the gain?

Asset	Purchase Date	Cost	Accumulated Depreciation	Sales Price	Sales Date
Equipment	11/12/2016	$105,000	$46,000	$125,000	8/19/19
Computer	4/12/2017	$20,000	$13,500	$3,750	8/19/19

A. $5,000 as ordinary income, gain of $59,500 subject to 1245 recapture and a L/T capital loss of $1,250.
B. $5,000 as ordinary income, gain of $46,000 subject to 1245 recapture and a L/T capital gain of $12,250.
C. $5,000 as ordinary loss, gain of $46,000 subject to 1250 recapture and a L/T capital gain of $17,250
D. $49,750 of gain subject to 1245 recapture and a L/T capital gain of $13,500.

E.  $5,000 as ordinary income, gain of $61,000 subject to 1245 recapture and a L/T capital loss of $2,750

. PS55, LLC, a calendar year taxpayer, made two asset purchases this year. The first purchase was a commercial office building costing $52,000,000 and the second purchase was a multi-family residential apartment building costing $48,000,000.  PS55, LLC performed minor construction and rehabilitation to both structures.  PS55, LLC placed the residential apartment building in service on March 1^st and the office building in service on December 10^th.  How many months of tax depreciation expense is PS55, LLC allowed for each asset?

A. 10.5 for months for the office building and 1.5 months of for the residential apartment building.
B. 10.5 for months for the residential apartment building and 1.5 months of for the office building.
C. 6 months for both investment properties.
D. A half month for the office building and 9.5 months of for the residential apartment building.

E. A half month for the residential apartment building and 9.5 months of for the office building.

Answer 1

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