Question

On August 1 of year 0, Dirksen purchased a machine for $28,500 to use in its business. On December 4 of year 0, Dirksen sold the machine for $24,250. Use MACRS Table. (Loss amounts should be indicated by a minus sign. Do not round percentages used for calculations. Round other intermediate computations to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

a. What is the amount and character of the gain or loss Dirksen will recognize on the sale?

	Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) §1231 gain/(loss)

Answer 1

	Description		Amount
a	Amount realized		$     24,250
b	Original basis		$     28,500
c	Accumulated Depreciation		$0
	Note: No depreciation is allowed on an asset placed in service and disposed of during the same taxable year. Asset held for less than one year are ordinary rather than section 1231 assets
d	Adjusted Basis (b-c)		$     28,500
e	Gain or (loss) recognized (a-d)		$     (4,250)
f	Ordinary Income ( §1245 depreciation recapture (lesser of c and e)		$0
e	Ordinary Loss (e-f)		$     (4,250)
	$ (4250) ordinary loss is answer
	Description	Amount
	Total Gain/(Loss) Recognized	$     (4,250)
	Character of Recognized Gain/(Loss):	Ordinary
	Ordinary Gain/(Loss)	$     (4,250)
	§1231 gain/(loss)	$0

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