RJ Owns a Used Crane That Was Originally Purchased on August

question 176

Multiple Choice

RJ owns a used crane that was originally purchased on August 1, 2012, for $180,000. Straight-line monthly amortization has been recorded on the basis of an estimated useful life of 5 years and no residual value. On January 31, 2015, RJ sold the crane for $92,000 cash. The pre-tax gain (loss) on the disposal was:

• A) $88,000 loss.
• B) $-0-
• C) $2,000 gain.
• D) $4,000 gain.

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Definitions:

Tax-sheltered Retirement Plans

Retirement savings plans that provide tax advantages to the saver, often by allowing pre-tax contributions or tax-free growth.

Tax Bill

The total amount of tax owed by an individual or corporation to a taxing authority, after all deductions, credits, and exemptions.

Take-home Pay

The amount of income left after deductions such as taxes and social security contributions have been subtracted from an individual's gross salary.

Taxes Combined

A calculation that aggregates all applicable taxes (federal, state, local) on an individual or entity's income.