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

question 136

Essay

Charmine, a single taxpayer with no dependents, has already incurred a $10,000 § 1231 gain in 2018 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?

---

Definitions:

Victim Availability

The presence or accessibility of individuals who can be targeted for criminal acts.

Social Oppression

A system where one group unjustly exerts power and control over another, often leading to inequality and lack of access to resources.

Marginalized Individuals

People who are pushed to the margins of society and are denied access to resources and opportunities because of their social, economic, or cultural identity.

Honor as Men

A cultural or social construct that defines the standards and behaviors considered respectable and worthy of esteem for men within a particular society.