The Following Table Describes the § 1231 Assets Sold by Tan

question 10

Essay

The following table describes the § 1231 assets sold by Tan Company (a sole proprietorship) this year.Compute the gain or loss from each asset disposition and determine the net § 1231 gain treated as long-term capital gain for the year.Assume that there is a § 1231 lookback loss of $14,000. $$\begin{array} { l c c c c c } \text { Asset } & \text { Acquired } & \text { Sold } & \text { Cost } & \text { Depreciation } & \text { Sale Price } \\\text { Stamping machine } & 3 / 10 / 15 & 8 / 10 / 19 & \$ 40,000 & \$ 29,736 & \$ 2,000 \\\text { Factory building } & 2 / 12 / 12 & 7 / 23 / 19 & 80,000 & 18,838 & 90,000 \\\text { Tractor } & 5 / 16 / 14 & 11 / 13 / 19 & 52,000 & 52,000 & 60,000 \\\text { Overhead crane } & 11 / 12 / 08 & 2 / 25 / 19 & 74,000 & 74,000 & 18,000\end{array}$$

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Definitions:

Industry Structure

The characteristics that influence the nature of competition and pricing in a particular industry, including the number and size of firms, entry barriers, and product differentiation.

Government Restrictions

Regulations imposed by authorities to control or limit certain activities, behaviors, or operations.

Exclusive Right

A legal provision giving the holder the sole permission to produce, use, or sell a particular commodity or concept.

Cement

A binding agent used in construction that sets, hardens, and adheres to other materials, commonly used to bind sand and gravel in concrete.