Jax is in the landscaping business. He owns a 20-foot x 20-foot storage garage on a  small plat of land which serves as his office and the storage facility for his landscaping  equipment. He paid $90,000 for the garage and has claimed $22,000 in depreciation deductions over the 6 years he has been using this garage in his business activities.  Jax also owns a wide variety of gas and electric-powered landscaping machines which  he purchased for $72,000 and has claimed depreciation deductions of $41,000 as of April
1, 2022. On April 1, 2022 Jax sells the garage and land for $130,000 and the  landscaping equipment for $47,000.
a) How much gain or loss should Jax report on his 2022 federal  income tax return as a result of the sale of the garage and land?
b) How much of the gain or loss is reported as  Section 1231 gain or (loss)?
Long-term capital gain or (loss)?
Ordinary income or (loss)? 

c) How much gain or loss should Oliver report on his 2022 federal  income tax return as a result of the sale of the landscaping machines?
d)  How much of the gain or loss is reported as
Section 1231 gain or (loss)?
Long-term capital gain or (loss)?
Ordinary income or (loss)? 

Answer rating: 100% (QA)

a To determine the gain or loss on the sale of the garage and land we need to subtract the adjusted ... View the full answer