This year, Taxpayer sold equipment to his wholly owned corporation at its fair market value of $75,000.
Question:
This year, Taxpayer sold equipment to his wholly owned corporation at its fair market value of $75,000. Taxpayer acquired the equipment several years ago for a cost of $70,000 and has deducted $43,761 in depreciation through the date of sale. Determine the amount and ultimate character of the gain or loss Taxpayer realizes on the sale/ This year, Taxpayer sold equipment to his wholly owned corporation at its fair market value of $75,000. Taxpayer acquired the equipment several years ago for a cost of $70,000 and has deducted $43,761 in depreciation through the date of sale. Determine the amount and ultimate character of the gain or loss Taxpayer realizes on the sale?
a $48,761 ordinary income
b $43,761 unrecaptured section 1250 gain plus $5,000 section 1231 gain
c $48,761 section 1231 gain
d $43,761 ordinary income plus $5,000 section 1231 gain
Entrepreneurial Finance
ISBN: 978-0538478151
4th edition
Authors: J . chris leach, Ronald w. melicher