In 2016, Mary sells for $14,000 a machine used in her business. The property was purchased on
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In 2016, Mary sells for $14,000 a machine used in her business. The property was purchased on May 1, 2014, at a cost of $13,000. Mary has claimed depreciation on the machine of $8,000. What is the amount and nature of Mary’s gain as a result of the sale of the machine?
a. $9,000 Section 1231 gain
b. $9,000 ordinary income under Section 1245
c. $8,000 ordinary income and $1,000 Section 1231 gain
d. $8,000 Section 1231 gain and $1,000 ordinary income under Section 1245
e. None of the above
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The correct answer is c 8000 ordinary income and 1000 Section 1231 gain Heres how the calcul...View the full answer
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Related Book For 
Income Tax Fundamentals 2017
ISBN: 9781305872738
35th Edition
Authors: Gerald E. Whittenburg, Steven Gill, Martha Altus Buller
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