Olive Company Sells Factory Equipment with an Adjusted Basis of $30,000

question 1

Multiple Choice

Olive Company sells factory equipment with an adjusted basis of $30,000 for $33,000. Allowable depreciation of $8,000 had been deducted as of the sale date. What is the amount and character of the gain or (loss) on the sale of the equipment?

• A)$- 0 -
• B)$3,000 Section 1245 ordinary income.
• C)$8,000 Section 1245 ordinary income.
• D)$3,000 long-term capital gain, and $8,000 Section 1245 ordinary income.
• E)$3,000 long-term capital gain.

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Definitions:

Transnational Corporations

Large companies that operate in several countries around the world, often having a significant impact on global trade, economy, and politics.

Poor Countries

Nations with low levels of economic productivity, low standards of living, and often lacking in the basic infrastructure and services necessary for a high quality of life.

Benefits

Forms of compensation provided to employees or members of a community, which may include health insurance, pensions, grants, or access to services and facilities.

International Monetary Fund

An international financial institution created in 1945 to promote global monetary cooperation, secure financial stability, facilitate international trade, and reduce poverty worldwide.