A Business Machine Purchased April 10, 2016, for $62,000 Was

question 51

Essay

A business machine purchased April 10, 2016, for $62,000 was fully depreciated in 2016 using § 179 immediate expensing. On August 15, 2017, the sole proprietor who owned the machine gave it to his son. On that date, the machine's fair market value was $57,000. The son did not use the machine in business or hold it as inventory and the machine was sold on November 22, 2017, for $53,000.What is the amount and nature of the gain or loss from disposition of the machine? Where is it reported in the son's tax return?

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Definitions:

Oligopoly

A market structure characterized by a small number of firms that dominate the market, leading to limited competition and potentially higher prices for consumers.

Perfectly Competitive

describes a market structure where there are many buyers and sellers, products are homogeneous, and there are no barriers to entry or exit, leading to optimal distribution and resource allocation.

Contestable Markets

Markets in which entry and exit are easy enough to hold prices to a competitive level even if no entry actually occurs.

Oligopolistic Firms

Companies operating within an oligopoly, a market structure characterized by a small number of firms controlling a large market share, often leading to limited competition.