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Problem 8-39(LO.6,7) On June 1,2019, Skylark Enterprises (a calendar year LLC reporting as...

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Accounting

Problem 8-39(LO.6,7)
On June 1,2019, Skylark Enterprises (a calendar year LLC reporting as a sole proprietorship) acquired a retail store building for \(\$ 500,000\)(with \(\$ 100,000\) being allocated to the land). The store building was 39-year real property, and the straight-line cost recovery method was used. The property was sold on June 21,2023, for \(\$ 385,000\).
Click here to access EXHIBIT 5.6 MACRS Straight-Line Depreciation for Real Property.
Carry all cost recovery rates out to five decimal places. Round the total cost recovery deduction to the nearest dollar.
a. Compute the cost recovery and adjusted basis for the building.
Total cost recovery is \(\$ \)
\(\mathbf{X}\), and the adjusted basis for the building is \(\$ \)
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b. What are the amount and nature of Skylark's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured \(\S 1250\) gain?
There is \(\$ \)\( X \) of recognized
\(\checkmark \) on the sale of the property, of which
\(\checkmark \) is subject to \(\S 1250\) recapture.
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