The Chart Below Describes the § 1231 Assets Sold by the Tan

question 134

Essay

The chart below describes the § 1231 assets sold by the Tan Company (a sole proprietorship) this year. Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as long­term capital gain for the year. Assume there is a § 1231 lookback loss of $14,000.
$$\begin{array} { l c c r r r } \text { Asset } & \text { Acquired } & \text { Sold } & \text { Cost } & \text { Deprecintion } & \text { Sale Price } \\\text { Stamping machine } & 3 / 10 / 10 & 8 / 10 / 2014 & \$ 40,000 & \$ 29,76 & \$ 2,000 \\\text { Factary building } & 2 / 12 / 07 & 7 / 23 / 2014 & 80,000 & 18,838 & 90,000 \\\text { Tractor } & 5 / 16 / 09 & 1 / 13 / 2014 & 52,000 & 52,000 & 60,000 \\\text { Overhead crane } & 1 / 12 / 03 & 2 / 25 / 2014 & 74,000 & 74,000 & 18,000\end{array}$$

---

Definitions:

Cash Flow

Cash flow refers to the net amount of cash being transferred in and out of a business, indicating its financial health.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment, by discounting future cash flows to their present value and subtracting the initial investment cost.

Canadian Dollars

The official currency of Canada, denoted as CAD.

Mexican Pesos

The currency of Mexico, used in financial transactions within the country.