White Company Acquires a New Machine for $75,000 and Uses

question 39

Multiple Choice

White Company acquires a new machine for $75,000 and uses it in White's manufacturing operations.A few months after White places the machine in service, it discovers that the machine is not suitable for White's business.White had fully expensed the machine in the year of acquisition using § 179.White sells the machine for $60,000 in the tax year after it was acquired but held the machine only for a total of 10 months.What was the tax status of the machine when it was disposed of and the amount of the gain or loss?

• A)A capital asset and $60,000 gain.
• B)An ordinary asset and $60,000 gain.
• C)A § 1231 asset and $60,000 gain.
• D)A § 1231 asset and $60,000 loss.
• E)None of these.

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Definitions:

Computerized Scheduling

The use of computer programs and software to organize appointments, tasks, or events, improving efficiency and accuracy over traditional scheduling methods.

Stream Scheduling

A method used in computing and broadcasting for organizing data processing or transmission according to a predetermined sequence or time.

Time-specified Scheduling

An appointment system where patients are given specific times for their visits, aiming to reduce waiting periods and streamline the process.

Double-booking System

A method used in accounting that records each transaction in two accounts to ensure the balance sheet remains balanced.