The tax treatment regarding the sale of existing assets which are sold for more than the book value and more than the original purchase price results in
A) no tax benefit or liability.
B) an ordinary tax benefit.
C) a capital gain tax liability and recaptured depreciation taxed as ordinary income.
D) recaptured depreciation taxed as ordinary income.

Question

Quizplus · Accepted Answer

When the sale price of an existing asset is more than the book value and the original purchase price, it results in a capital gain tax liability. Additionally, any depreciation taken on the asset over the years will need to be recaptured and taxed as ordinary income. Therefore, the correct answer is C - a capital gain tax liability and recaptured depreciation taxed as ordinary income.

The Tax Treatment Regarding the Sale of Existing Assets Which