Elmer sold machinery used in his business for $20,000. The machinery originally cost $80,000 and had $35,000 of accumulated depreciation at the time of the sale. It is his only sale this year.
a.What is the gain or loss on the sale of the machinery?
b.Is the gain or loss treated as capital or ordinary? Explain.

Question

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The Answer of Elmer sold machinery used in his business for $20,000. The machinery originally cost $80,000 and had $35,000 of accumulated depreciation at the time of the sale. It is his only sale this year.
a.What is the gain or loss on the sale of the machinery?
b.Is the gain or loss treated as capital or ordinary? Explain.

Elmer Sold Machinery Used in His Business for $20,000