### Explaining the tax effects of the sale

##### Reference no: EM13991895

Howard Company is 100% owned by Rona. During the current year, Howard sells some land to Rona for \$50,000 that had cost Howard \$80,000 and that had a fair market value of \$100,000. Write a letter to Rona explaining the tax effects of the sale.

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What is Jana's maximum deduction if the property is ordinary income property? What is Jana's maximum deduction if the property is long-term capital gain property? How would yo

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If Paula's adjusted gross income is \$35,000, what is her allowable deduction for taxes? Assume the same facts as in part a, except that Paula pays \$1,600 in sales tax on a mo