In 2019 Angela, a Single Taxpayer with No Dependents, Disposed

question 8

Essay

In 2019 Angela, a single taxpayer with no dependents, disposed of a business building for $44,000 that cost $100,000.
Depreciation of $60,000 had been taken on the building.Angela has a short-term capital loss of $3,000 this year.She has taxable income (not related to property transactions) of $125,000 and no § 1231 lookback loss.What is the amount and nature of the gain or loss, what is Angela's taxable income, and what is her tax on the taxable income?

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Definitions:

WACC

The Weighted Average Cost of Capital is a metric that calculates a company's cost of capital, with each capital category being weighted proportionally.

Capital Budgeting

The process by which investors or managers decide which capital investment projects - like new machinery or expansion plans - to undertake, based on potential profitability and risk analysis.

Opportunity Cost

A cash flow that a firm must forego to accept a project. For example, if the project requires the use of a building that could otherwise be sold, the market value of the building is an opportunity cost of the project.

Overall WACC

A comprehensive measure of a company's cost of capital, incorporating the weighted costs of its equity and debt financing.