Truffles, Inc. is a chocolate store. This year, it sells a chocolate tempering machine that qualifies as a §1231 asset for $60,000. Truffles purchased the machine two years ago for $50,000, has taken $20,000 of depreciation deductions, and has been using it in its business the entire time. Last year, Truffles had a $5,000 net loss from the sale of a different §1231 asset. This year, Truffles also has a net long term capital loss of $20,000, not accounting for the sale of the tempering machine.

You are Truffles’ CPA. Based on these facts, what does Truffles report on its federal income tax return?

Answer rating: 100% (QA)

Solution Gross taxation refers to the total amount of taxes that are owed by a taxpayer before any deductions or credits are applied In the case of Tr... View the full answer