Green, Inc. acquired a machinery on May 13, 2017, for its business use for $67,000

The machinery completely destroyed by a fire on June 9, 2021 with its adjusted basis of $12,500.

The company received $41,000 of insurance proceeds for the machinery and did not replace it. This was the only casualty or theft event for the year.

a. Determine the gain or loss amount in 2021. Enter an absolute amount.

Determine the treatment of the gain or loss amount:

(Select one of the choices and enter to the box: 1231 gain, 1231 loss, 1245 gain, 1245 loss, 1250 gain, 1250 loss, ordinary gain, ordinary loss, short term capital loss, short term capital gain, long term capital gain, long term capital loss) DO NOT ENTER THE DASH.

Answer rating: 100% (QA)

Given Cost of machinery 67000 Adjusted basis 12500 Insurance ... View the full answer