Charmine,a Single Taxpayer with No Dependents,has Already Incurred a $10,000

question 60

Essay

Charmine,a single taxpayer with no dependents,has already incurred a $10,000 § 1231 gain in 2014 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 $322,000 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:

Trait Self-Esteem

The enduring sense of worth or value that one attributes to oneself as a consistent aspect of their personality.

Self-Verification

The desire to be understood and recognized by others according to one's firmly held beliefs and feelings about oneself.

Self-Handicapping

A cognitive strategy by which people avoid effort in the hopes of keeping potential failure from hurting self-esteem.

Self-Complexity

A concept in psychology that describes the extent to which an individual’s self-concept is comprised of multiple and distinct aspects.