Network Corporation Purchased $200,000 of Five-Year Equipment on March 24,2012

question 82

Essay

Network Corporation purchased $200,000 of five-year equipment on March 24,2012.They elected to expense $60,000 of the cost under Sec.179 in effect that year.After depreciating the equipment $28,000 in 2012 and $22,400 in 2013,the equipment was sold for $190,000.
a.What is the amount of the realized gain (or loss)on the sale?
b.How is the gain or loss taxed?

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Definitions:

Great Depression

A global economic downturn of severe magnitude, primarily occurring in the 1930s, starting in the United States.

Roosevelt Administration

The period of U.S. history during Franklin D. Roosevelt's presidency, known for significant economic reforms known as the New Deal.

Federal Government Agencies

Organizations established by the federal government to implement certain policies, regulate activities, and provide specific services.

Mortgages

Loans secured by real property used by individuals and businesses to purchase homes or other real estate without paying the entire purchase price upfront.