Question - In 2010, Andrea sold a piece of equipment from Andrea's business for $300,000. The equipment was purchased in 2006 for $180,000. It had a useful life of five years and was depreciated on a straight-line basis. Assume total of $126,000 depreciation was taken (prior to the sale). What is Andrea's recognized gain on the sale?
a. $300,000
b. $246,000
c. $126,000
d. $120,000
Refer to the facts stated in the prior question. What amount of the gain will be recaptured at Andrea's ordinary income rate?
a. $300,000
b. $246,000
c. $126,000
d. $120,000
Refer to the facts stated in the prior two questions. What amount of the gain will be treated as Section 1231 gain and (possibly) taxed at the long-term capital gain rate?
a. $300,000
b. $246,000
c. $126,000
d. $120,000