Question

Corp, disposed of the following assets, all Sec 1231 property, during 2018:

Office furniture, MACRS, cost= 40000, Depreciation= 30000, Adj. Basis=10000, selling $22,000

Building, MACRS_SL, cost= 100000,Dep= 40000,Adj. Basis =60000,selling 105,000

Land ,NA, cost=50000, Dep= 0,Adj. Basis=50000,selling= 60,000

a) How much is Sec 1245 ordinary income recapture?

b) How much is Sec 1250 ordinary income recapture?

c) How much is Sec 291 ordinary income recapture?

d) What is net Sec 1231 gain (loss) for 2019?

e) If a corporation has $6,000 of unrecaptured Sec 1231 losses from 2014, what is the character of the current year net Sec 1231 gain (loss)?

Answer 1

a)ordinary income recapture under section 1245

office furniture;$12000 and $30000

building;$45000 and $40000

land;$10000

b)ordinary income recaptured under section 1250

office furniture;$10000

building;$60000

land;$50000

c)Sec 291 ordinary income recapture

office furniture;$400

bilding;$6250

land;$8000

d)net Sec 1231 gain (loss)

office building($8000)

building $65000

land $60000

e)current year net Sec 1231 gain (loss)

office furniture;($14000)

building $59000

land $54000

0