Question

[The following information applies to the questions displayed below.] On August 1 of year 0, Dirksen purchased a machine for $40,500 to use in its business. On December 4 of year 0, Dirksen sold the machine for $37,250. 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 are 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? Amount Description Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) $1231 gain/(loss) $ 0

Answer 1

note - for your better understanding the question is solve in clean sheet..

Workings: Amount Realized 37,500 Original Basis 40,500 Less: Accumulated Dept (10746) • Adjusted Basis 29,754 • Gain loss) Recognized 7746 37,500-29,754)

=) Calculation of Deprecation 40,500 x 14.29 x 14.29 + 40500 x 12.245 100 100 5787 + 4959 10746

note - Depreciation on machinery calculated on the basis of sold on January 15 of year 1 instead.

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