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Bozeman Sold Equipment That It Uses in Its Business for $80,000

Question 45

Multiple Choice

Bozeman sold equipment that it uses in its business for $80,000. Bozeman bought the equipment two years ago for $75,000 and has claimed $20,000 of depreciation expense. What is the amount and character of Bozeman's gain or loss?


A) $20,000 ordinary gain, and $5,000 §1231 gain.
B) $25,000 capital gain.
C) $25,000 §1231 gain.
D) $5,000 ordinary gain, and $20,000 §1231 gain.
E) None of the choices are correct.

Correct Answer:

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