Dontrell Sells a Building Used in His Business at a Gain

question 119

Multiple Choice

Dontrell sells a building used in his business at a gain of $20,000.The building was purchased in 2006,and $15,000 of depreciation had been deducted on the building to the date of sale.Dontrell's only other property transaction resulted in a $5,000 loss on the sale of equipment used in his business.Dontrell's marginal tax rate is 33% without considering these two transactions.As a result of these transactions
I.Dontrell will pay additional tax of $2,850.
II.Dontrell can only deduct $3,000 of the loss on the sale of the equipment and pays a tax of $3,750 on the sale of the building.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Career Planning

The ongoing process of managing one's work life, including setting career goals and designing a path towards them.

Long-Term Goals

Objectives or targets that an individual, group, or organization aims to achieve over an extended period, typically exceeding one year.

Short-Term Goals

Objectives intended to be achieved in a relatively short period, typically less than one year.

Initial Goals

The primary objectives or aims set at the beginning of a project or process.