Answered: The amount that was recorded as a…

Business

Accounting

The amount that was recorded as a realized gain or loss was

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter22: S Corporations

Section: Chapter Questions

Problem 23CE

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

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On September 15, 2018, Alonso Ltd, sells 62 common shares of Bandi Corp.which were being held as a trading investment (accounted for using the FtRLl model). The shares were acquired six months ago at S145 a share. Alonso s thelshares for $52 a share. The amount that was recorded as a realized gain or loss was

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