How gain split between recapture and capital gain treatment

Assignment Help Accounting Basics

Reference no: EM133901482

Problem

The requirements that are needed for an asset to be subject to Section 1245 recapture are depreciable personal property. For this to apply there has to be a recognized gain on the sale. The gain that is recaptured is equal to the depreciation or amortization that was previously allowed on the asset. Under Section 1245 it is taxed as ordinary income instead of a capital gain. Even though the equipment was owned for less than a year the recapture can still occur. It doesn't matter the time something was owned but whether or not there has been depreciation. It this situation recapture does apply. Any gain that occurred is considered as a capital gain. Get the instant assignment help. What would happen if the equipment was sold for less than its original purchase price but more than its adjusted basis? How would the gain be split between recapture and capital gain treatment in that case?

Reference no: EM133901482

Questions Cloud

Analyze the target audience and market segmentation : Apply the concepts and tools learned throughout the course to analyze a brand or company. Students will create a 5-10 minute video presentation showcasing

Determine sweet cukes should continue to sell cucumbers : Make an analysis to determine whether sweet cukes should continue to sell cucumbers or process them further into pickles.

What does she need to do to reinstate her license : Kate allowed her license to lapse two and a half years ago. What does she need to do to reinstate her license?

Per the independent contractor agreement : Per the independent contractor agreement, who owns the photos and brokerage listings if the licensee is the one who secured them?

How gain split between recapture and capital gain treatment : The requirements that are needed for asset to be subject to Section 1245. How would the gain be split between recapture and capital gain treatment in that case?

What is the context of the ethical it dilemma : What is the context of the ethical IT dilemma, including the regulatory or legal environment, specific guidelines of industry groups.

Compare and contrast the article to a paid advertisement : Compare and contrast the article to a paid advertisement for that nonprofit. Remember to include a link to the article and the advertisement

What effect does the sale have on harts tax liability : What are the amount and character of Hart's recognized gain or loss if asset is tangible? What effect does the sale have on Hart's tax liability for the year?

Judge awarded joint legal custody : Ed and Michelle were married in California in 1996. The judge awarded joint legal custody but granted Michelle solephysical custody.

User Account

All Pages