Problem $11-50($LO $11-5)($Algo$)$

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Aruna, a sole proprietor, wants to sell two assets that she no longer needs for her business. Both assets qualify as $1231$ assets. The first is machinery and will generate a $$34,7501231$ loss on the sale. The second is land that will generate a $$8,5001231$ gain on the sale. Aruna's ordinary marginal tax rate is $32$ percent.

Note: Input all amounts as positive values.

Problem $11-50$ Part$-$b $($Algo$)$

b$.$ Assuming that Aruna sells the land in December of year $1$ and the machinery in January of year $2,$ what effect will the sales have on Aruna's tax liability for each year?