This year, Sigma Inc. generated $633,000 income from its routinebusiness operations. In addition, the corporation sold thefollowing assets, all of which were held for more than 12months.
| InitialBasis | Acc.Depr.* | Sale Price |
| Marketable securities | $ | 183,200 | $ | 0 | $ | 85,250 |
| Production equipment | | 108,400 | | 86,720 | | 35,500 |
| Business realty: | | | | | | |
| Land | | 222,750 | | 0 | | 233,250 |
| Building | | 287,000 | | 86,100 | | 298,000 |
|
*Through date of sale.
- Compute Sigma’s taxable income assuming that it used thestraight-line method to calculate depreciation on the building andhas no nonrecaptured Section 1231 losses.
- Recompute taxable income assuming that Sigma sold thesecurities for $186,400 rather than $85,250.
