A Business Taxpayer Sold All the Depreciable Assets of the Business

question 107

Essay

A business taxpayer sold all the depreciable assets of the business, calculated the gains and losses, and would like to know the final character of those gains and losses.The taxpayer had $353,000 of adjusted gross income before considering the gains and losses from sale of the business assets.The taxpayer had unrecaptured § 1231 lookback loss of $12,000.What is the treatment of the gains and losses summarized in the chart below after all possible netting and reclassification has been completed? What is the taxpayer's adjusted gross income? (Ignore the self-employment tax deduction.) $$\begin{array} { l c c c c } \text { Asset } & \text { Purchase Date } & \text { Sale Date } & \text { Depreciation } & \text { Gain (Loss) } \\\text { Machine \#1 } & 10 / 10 / 15 & 11 / 11 / 17 & \$ 323,000 & \$ 66,000 \\\text { Machine \#2 } & 10 / 02 / 15 & 11 / 11 / 17 & 65,000 & ( 15,000 ) \\\text { Machine \#3 } & 09 / 23 / 13 & 11 / 11 / 17 & 183,000 & 23,000 \\\text { Machine \#4 } & 09 / 23 / 13 & 11 / 11 / 17 & 28,000 & 64,000\end{array}$$

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Treatments for mental disorders that involve physiological interventions, such as medication, surgical methods, or other medical procedures, to alter an individual's brain chemistry or functioning.

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A medical treatment involving electrically induced seizures for therapeutic effect, primarily used in severe cases of depression.

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The treatment of disease by administering pharmaceutical substances.