Melody Works in Her Home Using a Computer She Purchased

question 27

Multiple Choice

Melody works in her home using a computer she purchased two years ago for $2,500.The total adjusted basis for the computer is now $1,000.Her husband and children used the computer 20 percent of the time to play computer games and for personal correspondence.She sells the computer for $1,200.How much and what kind of gain does Melody recognize?

• A)$200 capital gain
• B)$200 Section 1245 recapture
• C)$200 Section 1231gain
• D)$460 Section 1245 recapture

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Definitions:

Process Re-Engineering

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical areas such as cost, quality, service, and speed.

Mechanistic Organisation Design

A form of organizational structure characterized by rigid departmentalization, a clear hierarchy of authority, and a high degree of formalization in procedures and rules.

Strategic Objectives

Specific, measurable goals that an organization aims to achieve as part of its larger strategy.

Core Processes

The essential activities and procedures that are central to an organization's function and value creation.