Question

When a taxpayer sells an asset, what is the difference between realized and recognized gain or...

When a taxpayer sells an asset, what is the difference between realized and recognized gain or loss on the sale? Please explain in depth with example.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

When a taxpayer sells an asset, what is the difference between realized and recognized gain or loss on the sale?

Recognized gain or loss on the sale the difference between the basis of the asset and the sale price or it is the exact profit earned when you make a sale of asset. In the current example, if you have sold your asset for $100 and it has cost of $70, you have made a profit of $30 i.e. recognized gain of $30.

Realized gain or loss on the sale is the exact money you have actually earned while selling an asset. As per current example, you have a recognized gain of $30 and assume you have incurred $5 as commission & brokerage charges. Then the realized gain is $25 (i.e. 30-5).

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
etermine the realized, recognized, and postponed gain or loss, as well as the new basis for...
etermine the realized, recognized, and postponed gain or loss, as well as the new basis for each of the following qualified like-kind exchanges: If an amount is zero, enter "0". Adjusted Basis of Old Asset Boot Given Fair Market Value of New Asset Boot Received a. $13,000 $0 $18,000 $6,000 b. 26,000 5,000 24,000 0 c. 90,000 22,000 63,000 13,000 d. 5,000 0 11,000 0 e. 38,000 0 49,000 2,000 f. 65,000 0 58,000 0
1,On an involuntary conversion, gain is recognized to the extent of the lower of gain realized...
1,On an involuntary conversion, gain is recognized to the extent of the lower of gain realized or the proceeds not used for replacement. True    False 2. If married taxpayers live in their personal residence for more than two years, the couple can exclude a maximum of $250,000 on the gain from the sale of the residence. True    False 3. Xavier is a self-employed plumber. His earnings from self-employment, before the Keogh deduction but after deducting half of the self-employment tax, are $80,000....
8) A taxpayer cannot recognize a taxable gain on sale of an asset if the selling...
8) A taxpayer cannot recognize a taxable gain on sale of an asset if the selling price is less than the amount the taxpayer originally paid for the asset. True False
1. Answer T or F for the following questions a) A taxpayer can deduct a realized...
1. Answer T or F for the following questions a) A taxpayer can deduct a realized loss on the sale of a personal use asset. b) A taxpayer is in the business of selling illegal drugs. the cost of the drugs can be claimed (deducted) on his return. c) Hobby losses (arising when expenses exceed revenue) are not deductible. d) A vacation home is used personally for 20 days and rented out for 50 days. Any allocated rental expenses in...
P realized the following gains and losses in the current year: • Gain on sale of...
P realized the following gains and losses in the current year: • Gain on sale of public company shares $20,000 • Gain on sale of listed personal property 2,000 • Gain on sale of personal-use property 1,000 • Loss on sale of small business corporation shares (5,000) • Loss on sale of listed personal property (3,000) • Loss on sale of personal-use property (5,000) What is the amount of net taxable capital gains to be reported for the current year...
Miller Company, a company who uses IFRS reporting standards, sells a non-current asset classified as held-for-sale....
Miller Company, a company who uses IFRS reporting standards, sells a non-current asset classified as held-for-sale. Which of the following statements is true regarding the treatment of a gain on a subsequent increase in the fair value less cost? The gain should be recognized but only in retained earnings. The gain should not be recognized. The gain should be recognized to the extent that it is not in excess of the cumulative impairment loss that has been recognized. The gain...
All of the following conditions would encourage a taxpayer to avoid like-kind exchange treatment on the...
All of the following conditions would encourage a taxpayer to avoid like-kind exchange treatment on the disposition of an otherwise qulifying asset except: A) the availabilty of net operating loss carryovers B) a realized loss on the asset disposed of. C) the disposition od a capital gain asset when the taxpayer has a capital loss carryover. D) expected lower tax rates in the future
Lisa sells business property with an adjusted basis of $152,700 to her son, Alfred, for its...
Lisa sells business property with an adjusted basis of $152,700 to her son, Alfred, for its fair market value of $122,160. If an amount is zero, enter "0". a. What is Lisa's realized and recognized gain or loss? Lisa has a $..............fill in the blank 1 realized loss of which $...........fill in the blank 3 is recognized. b. What is Alfred's recognized gain or loss if he subsequently sells the property for $167,970? For $99,255? If Alfred sells the property...
Mr. Fox, a single taxpayer, recognized a $64,000 long-term capital gain, a $14,300 short-term capital gain,...
Mr. Fox, a single taxpayer, recognized a $64,000 long-term capital gain, a $14,300 short-term capital gain, and a $12,900 long-term capital loss. Compute Mr. Fox’s income tax and Medicare contribution tax if his taxable income before consideration of his capital transactions is $441,000. Use Individual tax rate schedules and Tax rates for capital gains and qualified dividends. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
What is the difference between the reported gain (loss) on debt repurchase and the economic gain...
What is the difference between the reported gain (loss) on debt repurchase and the economic gain (loss) on the repurchase? How should such gains / losses be analyzed? Why are current values not reflected on a company's balance sheet?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT