Question

A couple of years ago, the company Health4All purchased land, a building, and two depreciable assets...

A couple of years ago, the company Health4All purchased land, a building, and two depreciable assets from another corporation. All of these have recently been disposed. Use the information shown to determine the presence and amount of any capital gain, capital loss, or depreciation recapture.

Asset Purchase Price, $ Recovery Period, Years Current Book Value, $ Sales Price, $
Land –210,000 - - 275,000
Building –800,000 27.5 260,000 255,000
Asset 1 –50,500 3 15,500 18,500
Asset 2 –10,000 3 5,000 11,000

The capital gain (CG) amount for land is determined to be $  .

The capital loss (CL) amount for building is determined to be $  .

The depreciation recapture (DR) amount for asset 1 is determined to be $  .

The depreciation recapture (DR) amount for asset 2 is determined to be $  .

The capital gain (CG) amount for asset 2 is determined to be $

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Answer #1

The capital gain (CG) amount for land is determined to be $ 275000 - 210000 = 65000 .

The capital loss (CL) amount for building is determined to be $ 255000 - 260000 = - 5000 .

The depreciation recapture (DR=sp exceeds adj cost basis) amount for asset 1 is determined to be $ 18500 - 15500 = 3000 .

The depreciation recapture (DR) amount for asset 2 is determined to be $ 11000 - 5000 = 6000 .

The capital gain (CG) amount for asset 2 is determined to be $ 6000 .

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