5. After 35 years in business for herself. Daisy retired and closed the doors of...
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5. After 35 years in business for herself. Daisy retired and closed the doors of her office. She her desk to her niece, Molly, who recently completed her degree in a similar field and opening up her practice. Daisy originally paid $12,000 for the desk, and it was depreciated by the time she gave it to Molly. Molly used the desk for two years, and then soll it (for $6.000) when she decided to redecorate her office. How will Molly treat the proceed from the sale of the gift for income tax purposes? 1. Since Molly received the desk as a gift, there is no need to pay taxes on the proceeds from the sale. b. Since the desk was given to Molly when it was fully depreciated, it is le property," and the $6,000 proceeds will not be taxable because it fell between Molly's gain basis and loss basis in the transaction. Molly will recognize $6,000 of ordinary income on the sale. d. Molly will recognize $6,000 of long-term capital gain on the sale
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