During the current year, a corporation sells equipment for $300,000. The equipment cost $270,000 when purchased and placed in service two years ago and $60,000 of depreciation deductions were allowed. The results of the sale are

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The equipment's adjusted basis is $210,000 ($270,000 cost - $60,000 depreciation). The sale price is $300,000, resulting in a gain of $90,000 ($300,000 - $210,000). The $60,000 depreciation is recaptured as ordinary income, and the remaining $30,000 is a Sec. 1231 gain.

During the Current Year, a Corporation Sells Equipment for $300,000