Quidik Corporation Sold a Machine for $80,000 That It Had

question 57

Multiple Choice

Quidik Corporation sold a machine for $80,000 that it had acquired three years ago for $68,000.If its adjusted basis when sold was $50,000,what should Quidik report on its tax return as a result of this sale?

• A)Section 1245 recapture of $18,000;Section 1231 gain of $30,000;
• B)Ordinary income = $12,000 and Section 1231 gain = $18,000
• C)Section 1245 recapture = $18,000 and Section 1231 = $12,000;
• D)Section 1231 gain = $38,000

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Definitions:

Benefit Costs

The expenses borne by employers for the non-wage compensations provided to employees, such as health insurance, pensions, and paid leave.

Entitlement Approach

A method in economic policy or welfare economics where benefits are distributed based on set criteria, often used to ensure that basic needs are met.

Effective Benefit System

A well-designed set of employee benefits that support the wellbeing of employees and contribute to job satisfaction and retention.

Tax Implications

Tax implications are the effects of financial decisions on the amount of taxes owed, influencing individual or business finances.