Question

Amber Industries (a sole proprietorship) sold three § 1231 assets during 2018. Data on these property dispositions are as follows:

Asset Cost Acquired Depreciation Sold For Sold On Rack $100,000 10/10/14 $100,000 $145,000 10/10/18 Forklift 35,000 10/16/15 23,000 3,000 10/10/18 Bin 87,000 03/12/17 31,000 60,000 10/10/18

a. Determine the amount and the character of the recognized gain or loss from the disposition of each asset. If an amount is zero, enter 0.

Asset Character of Gain or Loss Total Amount of Gain or Loss Amount of § 1245 Recapture Balance of Gain or Loss Rack Ordinary income and § 1231 gain Forklift § 1231 loss Bin Ordinary income

Amber has $ of ordinary income  due to § 1245 recapture. Additionally, she has $ of net § 1231 gain .

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Section 1245 applies primarily to non-real-estate property such as machinery, trucks, and office furniture.

b. Assuming that Amber has $5,000 nonrecaptured net § 1231 losses from the five prior years, analyze these transactions and determine the amount (if any) that will be treated as a long-term capital gain.
$

Answer 1

PART A

Asset	Character of Gain or Loss	Total Amount of Gain or Loss	Amount of 1245 Recapture	Balance of Gain or Loss
Rack	ordinary Income	$                        45,000.00	$                            45,000.00	$                                  -
Forklift	1231	$                           9,000.00	-	$                     9,000.00
Bin	ordinary Income	$                           4,000.00	$                               4,000.00	-
Amber has $ 49000 of ordinary income due to 1245 recapture and $9000 of 1231 net gain

PART B

Answer would be ZERO