1.

Inventory a. Does Joe have loss on the sale? If so, how much and how did you calculate it? b. Is the loss an ordinary or capital loss? Please explain why. 2. Machinery a. Does Joe have a gain on the sale? If so, how much and how did you calculate the gain? b. Is the gain ordinary income, capital gain, or some income that fits into each category? Please explain why and describe the application of sections 1231 and 1245 to the sale of the machinery. 3. Building a. Does Joe have a gain on the sale? If so, how much and how did you calculate the gain? b. Is the gain ordinary income, capital gain, or some income that fits into each category? Please explain why and describe the application of sections 1231 and 1250 to the sale of the building.