Blue Company sold machinery for $45,000 on December 23, 2018. The machinery had been acquired on April 1, 2016, for $69,000 and its adjusted basis was $34,200. The § 1231 gain, § 1245 recapture gain, and § 1231 loss from this transaction are:

Question

Quizplus · Accepted Answer

§ 1231 gain= $0 (selling price < adjusted basis)
§ 1245 recapture gain = $10,800 (the amount by which the selling price exceeded the lower of the adjusted basis or the original cost, which is $45,000 - $34,200)
§ 1231 loss = $0 (§ 1231 gain cannot be calculated since there is no gain, and the § 1245 recapture gain is less than any remaining adjusted basis, so there is no § 1231 loss)

Blue Company Sold Machinery for $45,000 on December 23, 2018