Buckley, an individual, began business two years ago and has never sold a 1231 asset....
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Buckley, an individual, began business two years ago and has never sold a 1231 asset. Buckley has owned each of the assets since he began the business. In the current year, Buckley sold the following business assets: Asset Accumulated Original Cost Depreciation Gain/Loss Computers $ 6,000 $ 2,000 $ (3,000) Machinery 10,000 4,000 (2,000) Furniture 20,000 12,000 7,000 Building 100,000 10,000 (1,000) Assuming Buckleys marginal ordinary income tax rate is 32 percent, answer the questions for the following alternative scenarios: (Loss amounts should be indicated by a minus sign. Input all other amounts as positive values.) Required: b1. Assume that the amount realized increased so that the building was sold at a $6,000 gain instead. What is the amount and character of Buckleys gains or losses for the current year? b2. Calculate Buckley's tax liability or tax savings for the year.
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