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

question 81

Essay

Charmine, a single taxpayer with no dependents, has already incurred a $10,000 § 1231 gain in 2012 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?

---

Definitions:

Respondents

Individuals who answer or respond to a survey or poll.

African American

A term referring to Americans of African descent, particularly those whose ancestors were enslaved and brought to the United States.

Cholesterol Screening

The process of testing individuals for levels of cholesterol in the blood, used to assess the risk of heart disease.

Statistic

A numerical value describing a characteristic of a sample, used to infer properties of the population from which the sample was drawn.