Suzanne, an individual, began business four years ago and has never sold a §1231 asset.Suzanne owned each of the assets for several years.In the current year, Suzanne sold the following business assets:
$$\begin{array} { l r r r r }
& & { \text { Accurmulated } } & \
\text { Asset } & \text { Original Cost } & \text { Depreciation } & { \text { Gair/Loss } } \
\text { Machirzery } & \$ 12,000 & \$7 , 000 & \$ 6,000 \
\text { Funiture } & 10,000& 2,000 & ( 3,000 ) \
\text { Building } & 90,000 & 20,000 & 15,000
\end{array}$$ Assuming Suzanne's marginal ordinary income tax rate is 32 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Question

Suzanne, an individual, began business four years ago and has never sold a §1231 asset.Suzanne owned each of the assets for several years.In the current year, Suzanne sold the following business assets:
 $$\begin{array} { l r r r r } 
& &  { \text { Accurmulated } } &  \
\text { Asset } & \text { Original Cost } & \text { Depreciation } &  { \text { Gair/Loss } }  \
\text { Machirzery } & \$ 12,000 & \$7 , 000 & \$ 6,000 \
\text { Funiture } & 10,000& 2,000 & ( 3,000 ) \
\text { Building } & 90,000 & 20,000 & 15,000
\end{array}$$ Assuming Suzanne's marginal ordinary income tax rate is 32 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Quizplus · Accepted Answer

The Answer of Suzanne, an individual, began business four years ago and has never sold a §1231 asset.Suzanne owned each of the assets for several years.In the current year, Suzanne sold the following business assets:
 $$\begin{array} { l r r r r } 
& &  { \text { Accurmulated } } &  \
\text { Asset } & \text { Original Cost } & \text { Depreciation } &  { \text { Gair/Loss } }  \
\text { Machirzery } & \$ 12,000 & \$7 , 000 & \$ 6,000 \
\text { Funiture } & 10,000& 2,000 & ( 3,000 ) \
\text { Building } & 90,000 & 20,000 & 15,000
\end{array}$$ Assuming Suzanne's marginal ordinary income tax rate is 32 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

Suzanne, an Individual, Began Business Four Years Ago and Has