McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

تمرين 46

{Research} Ken sold a rental property for $500,000; $100,000 in the current year and $100,000 per year thereafter. $400,000 of the sales price was allocated to the building and the remaining $100,000 was allocated to the land. Ken purchased the property several years ago for $300,000. $225,000 of the purchase price was allocated to the building and $75,000 was allocated to the land. Ken has claimed $25,000 of depreciation deductions over the years against the building. If Ken had no other sales of §1231 or capital assets in the current year, determine what Ken's recognized gain or loss is, the character of Ken's gain, and calculate Ken's tax due because of the sale (assuming his marginal ordinary tax rate is 35 percent). ( Hint: see the examples in Reg. §1.453-12.)