Umair sold some equipment he used in his business on August 29, 2019, that was originally purchased
Question:
Umair sold some equipment he used in his business on August 29, 2019, that was originally purchased for $65,000 on November 21,2018. The equipment was depreciated using the 7-year MACRS method for a total of $17,249. Assume there is no additional netting of gains and losses for this taxpayer.
a. Assume Umair sold the equipment for $45,000:
(1) What is the amount of realized gain or loss on the sale of the equipment?
(2) Is the nature of the gain or loss considered ordinary or long-term?
b. Assume Umair sold the equipment for $49,000:
(1) What is the amount of realized gain or loss on the sale of the equipment?
(2) Is the nature of the gain or loss considered ordinary or long-term?
Step by Step Answer:
Fundamentals Of Taxation 2020 Edition
ISBN: 9781260483147
13th Edition
Authors: Ana Cruz, Michael Deschamps, Frederick Niswander, Debra Prendergast, Dan Schisler