Hart, an individual, bought an asset for $500,000 and has claimed $100,000 of depreciation deductions against the asset. Hart has a marginal tax rate of 32 percent. Answer the questions presented in the following alternative scenarios (assume Hart had no property transactions other than those described in the problem): (Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable.) Required: a1. What is the amount and character of Hart’s recognized gain or loss if the asset is tangible personal property sold for $450,000? a2. Due to this sale, what tax effect does Hart have for the year?

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Answer

The answer and procedures of the exercise are attached in the following images.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in 2 sheets with the formulas indications.  

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