Exercise $8-8($Algorithmic$)(10\mathrm{.}6,7)$

Shannon owns two items of business equipment. Both were purchased in $2019$ for $$292,200,$ both have a $7-$year MACRS recovery period, and both have an adjusted basis of $$102,270.$ Shannon is considering selling these assets in $2023.$ One of them is worth $$175,320,$ and the other is worth $$73,050.$ Because both items were used in her business, Shannon simply assumes that the loss on one will offset the gain from the other and that the net gain or loss will increase or reduce her business income.

Which of the following must Shannon determine in order to properly handle this transaction? Select "Yes" if she must determine it; otherwise select $"$No$".$

a$.$ Whether she plans to purchase any property during the year.

b$.$ The outcome of the $1231$ netting process.

c$.$ Whether the property is a $1231$ asset, a capital asset, or an ordinary asset.

d$.$ Whether $1245$ depreciation recapture will apply.

What is the amount and character of Shannon's gain or loss for each asset?

Asset $1$: Cost, $$292,200$; adjusted basis, $$102,270$; sales price, $$175,320$ :

Due to the entire of $ will be treated as

Asset $2$: Cost, $$292,200$; adjusted basis, $$102,270$; sales price, $$73,050$ :

The entire! of $ will be treated as because $1245$ depreciation recapture applies only when there is a on the sale of an asset.