The Grid Corporation owns a bank of boring machines. They regularly replace two machines each year. In the current year, the company sold Machine 8 for $12,000. It was purchased six years earlier for $40,000, and its adjusted basis was $14,000. Machine 6 was sold for $24,000. It was purchased four years ago for $45,000 and had an adjusted basis of $19,000.
a. How much gain or loss is realized on each asset?
b. What is the character of the gain or loss?
c. If the company disposed of no other assets during the year, how are the results of these sales treated lor tax purposes?