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.) $$\begin{array} { l c c c c } \text { Asset } & \text { Purchase Date } & \text { Sale Date } & \text { Depreciation } & \text { Gain (Loss) } \\\text { Machine \#1 } & 10 / 10 / 15 & 11 / 11 / 17 & \$ 323,000 & \$ 66,000 \\\text { Machine \#2 } & 10 / 02 / 15 & 11 / 11 / 17 & 65,000 & ( 15,000 ) \\\text { Machine \#3 } & 09 / 23 / 13 & 11 / 11 / 17 & 183,000 & 23,000 \\\text { Machine \#4 } & 09 / 23 / 13 & 11 / 11 / 17 & 28,000 & 64,000\end{array}$$

Identify rational and integer numbers within sets.

Understand and apply the concept of the distance between numbers on the real number line.

Determine the opposite and the inequality involving real numbers.

Plot and interpret points on the real number line.

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Definitions:

Declarative Statement

A sentence that makes a statement or expresses an opinion, rather than giving a command or asking a question.

Simple Statement

A clear and straightforward declaration or expression, often consisting of only one clause.

Natural Language

Human languages, including both spoken and written forms, capable of expressing an infinite variety of ideas and emotions.

Logic of Declarative Statements

The formal principles governing the truth or falsehood of statements that declare facts.