A business machine, which cost $10,000 two years ago, was sold on January 1, this...
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Accounting
A business machine, which cost $10,000 two years ago, was sold on January 1, this year, for $19,000. Depreciation was as follows for the calendar-year taxpayer:
Actual Depreciation Straight-line Would
Allowed and Allowable Have Been
Two years ago $1,429 $1,000
Last year 2,449 2,000
This year 875 500
$4,753 $3,500
The adjusted basis of the property sold is:
a.
$5,247
b.
$6,500
c.
$10,000
d.
None of the above
The gain realized and recognized on the sale is:
a.
$9,000
b.
$12,500
c.
$13,753.
d.
$19,000
e.
None of the above
The character or nature of the gain realized and recognized is:
a.
All ordinary income
b.
All capital gain
c.
$4,753 ordinary income, $9,000 1231 capital gain
d.
$3,500 ordinary income, $9,000 1231 capital gain
e.
None of the above
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