On March 17, a Calendar-Year Taxpayer Sells a Machine Used

question 71

Multiple Choice

On March 17, a calendar-year taxpayer sells a machine used in its business for $9,500.The machine was purchased sixteen months earlier for $9,000 and depreciation deductions of $1,800 have been taken.What is the amount and type of gain recognized on the sale?

• A)$2,300 Section 1231 gain
• B)$2,300 ordinary income
• C)$1,800 Section 1245 recapture; $500 Section 1231 gain
• D)$1,800 Section 1250 recapture; $500 Section 1231 gain

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Definitions:

Reagent Strips

Test strips used to detect and measure various chemicals and substances in body fluids, often used for quick diagnostic results.

Quality Controls

Processes and procedures put in place to ensure the standards and integrity of products or services are maintained.

Calibrate

The act of adjusting and setting the accuracy of a measuring instrument or device to conform to standards.

White Blood Cells

Cells of the immune system involved in protecting the body against both infectious disease and foreign invaders.