Jake purchased a $235,000 crane for his construction business. He sold the crane for $175,000 after taking $115,000 of d...
Jake purchased a $235,000 crane for his construction business. He sold the crane for $175,000 after taking $115,000 of depreciation. Assume Jake is in the 35% tax rate bracket. - Use Current Tax Laws
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On what form would the gain or loss originally be reported?
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What is the amount of gain or loss on the sale?
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What amount of the gain or loss is subject to ordinary tax rates?
Homework Answers
Jake purchased a crane of $235000 and sold it for $175000 after taking depreciation of $115000.
So $235000-$115000= $120000 is the after depreciation cost sold for $175000.
Gain is $175000-$120000= $55000.
In form 4797 the gain to be reported.
All.of the gain is subject to ordinary tax rates because we have not taken more than depreciation.
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