The Chart Below Describes the § 1231 Assets Sold by the Tan

question 35

Essay

The chart below describes the § 1231 assets sold by the 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 there is a § 1231 lookback loss of $14,000.
Asset
Acquired
Sold
Cost
Depreciation
Sale Price
Stamping machine
3/10/12
8/10/2016
$40,000
$29,736
$ 2,000
Factory building
2/12/09
7/23/2016
80,000
18,838
90,000
Tractor
5/16/11
11/13/2016
52,000
52,000
60,000
Overhead crane
11/12/05
2/25/2016
74,000
74,000
18,000

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Definitions:

Investment

The allocation of resources, usually money, in something to earn income or profit.

Associate

A company in which another company owns a significant stake, typically between 20% and 50%, allowing some degree of influence without full control.

Significant Influence

The power to participate in the financial and operating policy decisions of another entity, but not control those policies.

Share Ownership

Denotes holding equity in a company, representing a claim on part of the company's assets and earnings.