24. In a like kind, a taxpayer maintains an investment in an asset other than cash except where there is a boot, then there is a partial gain. Gains are deferred through receiving a carryover basis in the like kind property received.
25. For real property, any 2 pieces of property qualify as like kind. For personal property, it must have the same general use as defined by the same asset class.
26. If Salazar completed the transaction by selling the property then buying the new property it would not be like kind. If it is done through a third party then it can qualify as like kind if property is identified within 45 days and received within 180 days of transfer.
29. Like Kind involves trade of similar assets within specified time. Involuntary conversion is replacement of property that was damaged by natural disaster.
71.
Asset
Realized G/L
1245 gain
291 gain
1231 gain
Ordinary G/L
Capital G/L
A
16100
8000

8100

B
-

C
2000

2000

D
28000

3000
17000

E
-4000

-4000
F
25000
9000

4000

G
650

650 h -870

-870

Total
66880
17000
3000
29100
1130
-3350
Part 1
a. 1231 b. no gain or loss due to no transaction to realize c. ordinary d. 1231 e. capital f. 1231 g. capital h. ordinary
Part 2
Realize 23750 in net capital gains and 23130 in ordinary income
1231 Netting Process
1231 gain 29100
Unrecaptured 1231 losses 2000
Net 1231 gain 27100

Capital Gains Netting process
Net capital loss -3350
1231 gain 27100
Net capital gain 23750

Ordinary Income Calculation

Ordinary Income gain or loss 1130
1245 gain 17000
1291 gain 3000
Recaptured 1231 gain 2000
Ordinary Income 23130

Purdue Company
Hammond, Indiana
September 29, 2014

To:
From:
Subject:
Steve Whatzhizname
Jessica France
Tax Consequences
According to the research I have done, I have found the tax liabilities that would impact your business for each entity as per requested. These entities are as follows: Limited Liability Corporation, known forward as LLC; Partnership and Corporation.
In a LLC, this one covers your personal assets the most as you make your company a separate entity then yourself. On the down side, there are usually fees that have to be paid to be formed as a LLC. Also, the taxes get split between the owners rather than being paid for by the company and this falls under what tax rate you pay as an owner.