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Lily Tucker (single) owns and operates a bike shop as a sole proprietorship. This year, she sells the following long-term assets used in her business:
Asset Sales Price Cost Accumulated
Building $230,000 $200,000 $52,000
Equipment 80,000 148,000 23,000
Lily's taxable income before these transactions is $160,500.
What are Lily's taxable income and tax liability for the year? Use Tax Rate Schedule for reference. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)
Gain/ loss on building = 230000-(200000-52000) = $ 82000 Gain /(loss) on equipment = 80000 - (148000-23000) = (45000) Net gain / (loss) = $ 37000.
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