Milton has the following transactions related to his investments and his business during 2018:
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(1) Stock purchased in 2004 is sold at a gain of $ \$ 2,000 $.
(2) Bonds purchased in 2018 are sold at a loss of $ \$ 7,000 $.
(3) A building used in his business is sold at a loss of $ \$ 6,000 $. The building had been purchased in 1997 and $ \$ 18,000 $ of depreciation had been taken on the buil ding.
(4) Equipment purchased in 2010 is sold at a gain of $ \$ 12,000 $. Depreciation of $ \$ 9,000 $ had been taken before the sale.
(5) A delivery van is destroyed in an accident. Milton realizes a loss of $ \$ 5,000 $ on the van. He uses the $ \$ 13,000 $ of insurance proceeds as a down payment on a new van costing $ \$ 28,000 $.

a.Determine the amount and character of each gain or loss.
b.Determine the effect of the gains and losses on Milton's 2018 adjusted gross income. You must present the calculations in proper form to receive full credit.

Question

Milton has the following transactions related to his investments and his business during 2018:
?
 (1) Stock purchased in 2004 is sold at a gain of $ \$ 2,000 $.
(2) Bonds purchased in 2018 are sold at a loss of $ \$ 7,000 $.
(3) A building used in his business is sold at a loss of $ \$ 6,000 $. The building had been purchased in 1997 and $ \$ 18,000 $ of depreciation had been taken on the buil ding.
(4) Equipment purchased in 2010 is sold at a gain of $ \$ 12,000 $. Depreciation of $ \$ 9,000 $ had been taken before the sale.
(5) A delivery van is destroyed in an accident. Milton realizes a loss of $ \$ 5,000 $ on the van. He uses the $ \$ 13,000 $ of insurance proceeds as a down payment on a new van costing $ \$ 28,000 $.
 
a.Determine the amount and character of each gain or loss.
b.Determine the effect of the gains and losses on Milton's 2018 adjusted gross income. You must present the calculations in proper form to receive full credit.

Quizplus · Accepted Answer

The Answer of Milton has the following transactions related to his investments and his business during 2018:
?
 (1) Stock purchased in 2004 is sold at a gain of $ \$ 2,000 $.
(2) Bonds purchased in 2018 are sold at a loss of $ \$ 7,000 $.
(3) A building used in his business is sold at a loss of $ \$ 6,000 $. The building had been purchased in 1997 and $ \$ 18,000 $ of depreciation had been taken on the buil ding.
(4) Equipment purchased in 2010 is sold at a gain of $ \$ 12,000 $. Depreciation of $ \$ 9,000 $ had been taken before the sale.
(5) A delivery van is destroyed in an accident. Milton realizes a loss of $ \$ 5,000 $ on the van. He uses the $ \$ 13,000 $ of insurance proceeds as a down payment on a new van costing $ \$ 28,000 $.
 
a.Determine the amount and character of each gain or loss.
b.Determine the effect of the gains and losses on Milton's 2018 adjusted gross income. You must present the calculations in proper form to receive full credit.

Milton Has the Following Transactions Related to His Investments and His