White Company Acquires a New Machine for $75,000 and Uses

question 21

Multiple Choice

White Company acquires a new machine for $75,000 and uses it in White's manufacturing operations. A few months after White places the machine in service, it discovers that the machine is not suitable for White's business. White had fully expensed the machine in the year of acquisition using § 179. White sells the machine for $60,000 in the tax year after it was acquired, but held the machine only for a total of 10 months. What was the tax status of the machine when it was disposed of and the amount of the gain or loss?

• A) A capital asset and $60,000 gain.
• B) An ordinary asset and $60,000 gain.
• C) A § 1231 asset and $60,000 gain.
• D) A § 1231 asset and $60,000 loss.
• E) None of the above.

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Definitions:

Cognitive Therapies

Psychological treatments aimed at identifying and changing distorted thinking patterns, emotional responses, and behaviors.

Love and Sex

Broad terms that encompass the complex interplay of emotional, physical, and social aspects of romantic relationships and sexual activities.

REBT

Rational Emotive Behavior Therapy, a form of psychotherapy that identifies irrational beliefs, challenges these beliefs, and encourages adopting more rational and adaptive beliefs.

Therapeutic Relationship

The professional and purposeful bond between a therapist and a client, critical for effective therapy.