Determine his adjusted basis for the building as of the date

Reference no: EM13283266

In 2014, Sandal, Inc has qualified production activities income (QPAI) of $3.75 million and taxable income of $4 million. Sandal pays independent contractors $500,000. Sandal's W-2 wages are $450,000, but only $225,000 of the wages paid are to employees engaged in qualified domestic production services.
a. How much is the domestic production activities deduction (DPAD) for Sandal, Inc. in 2013?
b. What suggestions might help Sandal increase its DPAD?

3. Juan acquired an apartment building on November 14, 2014, for $2.74 million. The value of the land was $440,000. Juan sold the apartment on October 22, 2020.

a. Determine his cost recovery for 2014
b. Determine his cost recovery for 2020
c. Determine his adjusted basis for the building as of the date of sale.
d. If Juan sold the building for $2.5 million, how much was his gain?

Reference no: EM13283266

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