Taxpayer A and B are related parties. If taxpayer A purchased a machine for $10,000, fully depreciated it (i.e., claimed $10,000 of depreciation), and then sold the machine to taxpayer B for $15,000, what is the amount and character of that gain if the machine will be depreciable in the hands of B?

Answer rating: 100% (QA)

Since the machine was fully depreciated by taxpayer A the entire 10000 depreciation claimed ... View the full answer