ABC Inc. sold the following assets this year, all of which had been held more than one year.
|
Sales Process
|
Original Cost
|
Tax Life/Method
|
Tax Accum. Depreciation
|
|
Furniture
|
$4,000
|
$8,500
|
7-yr MACRS
|
$3,125
|
|
Machine
|
$9,000
|
$12,000
|
7-yr MACRS
|
$5,700
|
|
Building 1
|
$95,000
|
$100,000
|
39-yr SL
|
$25,530
|
|
Building 2
|
$200,000
|
$150,000
|
27.5yr SL
|
$98,200
|
a. Calculate gain or loss and compute depreciation recapture for these sales.
b. Does the company have a net §1231 gain or loss. How will this net amount be treated in computing ABC's taxable income?
c. ABC's only capital asset transaction results in a loss on a sale of securities. Is this loss currently deductible if the amount of the loss is:
i. $(89,000)
ii. $(189,000)