Albert is in the 35% marginal tax bracket. He sold a building in the current year for $450,000. Albert received $110,000 cash at closing, the buyer assumed Albert's mortgage for $120,000, and the buyer gave Albert a 6% note for
$220,000 due in two years. The Federal rate was 6%. Albert's basis in the building was $180,000 ($500,000 cost -
$320,000 accumulated straight-line depreciation). Assuming that he did not elect out of the installment method, Albert's § 1231 gain and gain taxed at the 25% rate in the year of sale are what amounts? $\begin{array}{ll} \text {Section1231Gain}&
\text {Unrecaptured $ \$ 1250 $ GainTaxedat $ 25 \% $}\end{array}$

Question

Albert is in the 35% marginal tax bracket. He sold a building in the current year for $450,000. Albert received $110,000 cash at closing, the buyer assumed Albert's mortgage for $120,000, and the buyer gave Albert a 6% note for
$220,000 due in two years. The Federal rate was 6%. Albert's basis in the building was $180,000 ($500,000 cost -
$320,000 accumulated straight-line depreciation). Assuming that he did not elect out of the installment method, Albert's § 1231 gain and gain taxed at the 25% rate in the year of sale are what amounts? $\begin{array}{ll} \text {Section1231Gain}&
 \text {Unrecaptured $ \$ 1250 $ GainTaxedat $ 25 \% $}\end{array}$

Quizplus · Accepted Answer

The Answer of Albert is in the 35% marginal tax bracket. He sold a building in the current year for $450,000. Albert received $110,000 cash at closing, the buyer assumed Albert's mortgage for $120,000, and the buyer gave Albert a 6% note for
$220,000 due in two years. The Federal rate was 6%. Albert's basis in the building was $180,000 ($500,000 cost -
$320,000 accumulated straight-line depreciation). Assuming that he did not elect out of the installment method, Albert's § 1231 gain and gain taxed at the 25% rate in the year of sale are what amounts? $\begin{array}{ll} \text {Section1231Gain}&
 \text {Unrecaptured $ \$ 1250 $ GainTaxedat $ 25 \% $}\end{array}$

Albert Is in the 35% Marginal Tax Bracket Section1231GainUnrecaptured $1250 GainTaxedat 25%\begin{array}{ll} \text {Section1231Gain}& \text {Unrecaptured \( \$ 1250 \) GainTaxedat \( 25 \% \)}\end{array}Section1231Gain​Unrecaptured $1250 GainTaxedat 25%​

Albert Is in the 35% Marginal Tax Bracket $\begin{array}{ll} \text {Section1231Gain}& \text {Unrecaptured \( \$ 1250 \) GainTaxedat \( 25 \% \)}\end{array}$