Question

On August 1 of year 0, Dirksen purchased a machine for $29,250 to use in its business. On December 4 of year 0, Dirksen sold the machine for $23,750. Use MACRS Table. (Loss amounts should be indicated by a minus sign. Do not round percentages used for calculations. Round other intermediate computations to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.) b. What is the amount and character of the gain or loss Dirksen will recognize on the sale if the machine is sold on January 15 of year 1 instead? On August 1 of year 0, Dirksen purchased a machine for $29,250 to use in its business. On December 4 of year 0, Dirksen sold the machine for $23,750. Use MACRS Table. (Loss amounts should be indicated by a minus sign. Do not round percentages used for calculations. Round other intermediate computations to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

b. What is the amount and character of the gain or loss Dirksen will recognize on the sale if the machine is sold on January 15 of year 1 instead?

Total Gain/(Loss) Recognized =

Ordinary Gain/(Loss)=

1231 gain/(Loss)=

Answer 1

Amount Answers b) caleulation of the amount and character of the gain orlogs pirksen will recognize on the sale if the Machine is sold on Jan-15 of year I instead. particulars D Amount Realized 23,750 2) Original basis $29.250 3) Accumulated depreciation $7,762 9) Adjusted basis [$29,950-$7762] $21,488 Gaiul loog Recognized [ 23,750-$21,4837$ 2,262 b) ordinary income (sle 45 Depreciation 2,262 de capture) Lessor 463) ow(s)] |_ Ordinary logs $1231 so working Note: calculation of Accumulated Depreciation, Yearl Original basis (A) Rate (0) Depreciation (Ax B] i $29,250 14.29% $4,180 e $ 29,250 12.245% $3,582 $7,762 1 Noler 24.49%xt = 12.245% de depreciation because Machine sold on January is of year I instead