Charmine, a Single Taxpayer with No Dependents, Has Already Incurred

question 39

Essay

Charmine, a single taxpayer with no dependents, has already incurred a $10,000 § 1231 gain in 2017 and has no § 1231 lookback losses. The taxpayer purchased a business machine for $100,000 five years ago, $70,000 of depreciation has been taken on it, and the machine is now worth $90,000. How will the net § 1231 gain or loss be affected if the taxpayer trades in the business machine for a like-kind business machine and pays an additional $12,000 in cash to obtain the replacement machine? If Charmine already has $352,000 of taxable income which does not include a $10,000 § 1231 gain or any capital gains or losses, what is her taxable income?

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Definitions:

Minimizing Resistance

Strategies and actions aimed at reducing opposition or hesitancy towards change within an organization.

Communication

The act of transferring information from one place, person, or group to another through speech, writing, or some other medium.

Pilot Study

A small-scale preliminary study conducted to evaluate feasibility, time, cost, risk, and adverse effects.

Diffusion Of Change

The process by which innovations and new ideas spread within and across communities, organizations, or societal groups.