Suppose the Machine Company has production equipment that originally cost $1 million, and is classified as a 5-year MACRS asset, with the MACRS rates:
If the Machine Company sells the equipment at the end of two years for $1.1 million, the capital gain and recapture of depreciation, respectively, are:
A) $0; $520,000.
B) $0; $620,000.
C) $100,000, $520,000.
D) $100,000; $620,000.

Question

Suppose the Machine Company has production equipment that originally cost $1 million, and is classified as a 5-year MACRS asset, with the MACRS rates:
 If the Machine Company sells the equipment at the end of two years for $1.1 million, the capital gain and recapture of depreciation, respectively, are:
A) $0; $520,000. 
B) $0; $620,000. 
C) $100,000, $520,000. 
D) $100,000; $620,000.

Quizplus · Accepted Answer

The Answer of Suppose the Machine Company has production equipment that originally cost $1 million, and is classified as a 5-year MACRS asset, with the MACRS rates:
 If the Machine Company sells the equipment at the end of two years for $1.1 million, the capital gain and recapture of depreciation, respectively, are:
A) $0; $520,000. 
B) $0; $620,000. 
C) $100,000, $520,000. 
D) $100,000; $620,000.

Suppose the Machine Company Has Production Equipment That Originally Cost