Monique is planning to increase the size of the manufacturing business that she operates as a sole proprietorship. She has a number of older assets that she will replace as part of the expansion. In addition, to finance this expansion she will have to sell some of her personal assets. Because it is close to the end of the tax year, she can time the sales of the assets to take the greatest advantage of the tax laws. Monique is currently in the 39-6 percent tax bracket.
Following are the assets that Monique plans to sell; assume that she will realize their fair market value on the sales.

In addition to the proceeds from the sales of the business assets, Monique needs a minimum of an additional $800,000 for her planned expansion. What assets should Monique sell to minimize her tax liability on the sales of the business and personal assets?

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BUSINESS ASSETS FAIR DEPRECIATION ADJUSTED BASIS ORIGINAL COST DATE MARKET VALUE METHOD MACRS MACRS MACRS MACRS 0 $20,000 160,000 285,000 25,000 80,000 55,000 95,000 Truck 1997 3,000 300,000 10,000 60,000 Office building 1992 Machine 1 Machine 2 2006 2007 PERSONAL ASSETS Sculpture Painting 100,000 shares ACC 10,000 shares of BBL ACQUISITION DATE 1993 2000 2007 2012 FAIR MARKET VALUE $400,000 400,000 800,000 400,000 ORIGINAL COST 260,000 525,000 1,050,000 350,000