Jay sold three items of business equipment for a total of $300,000. None of the equipment was appraised to determine its value. Jay's cost and adjusted basis for the assets are shown below.
Asset ______________Cost ____________Adjusted Basis
Skidder ............... $230,000 ................... $ 40,000
Driller .................. 120,000 ..................... 60,000
Platform ............... 620,000 ......................... -0-
Total .................. $970,000 .................. $100,000
Jay has been unable to establish the fair market values of the three assets. All he can determine is that combined they were worth $300,000 to the buyer in this arm's length transaction. How should Jay allocate the sales price and figure the gain or loss on the sale of the three assets?