1. Remi operates a C corporation. This year, the business sold two assets.

• A machine - the sale generated $4,000 in depreciation recapture and a $12,000 1231 gain.
• Land used in business; held for more than one year the sale generated a $14,000 1231 loss.

What is the net effect of these transactions on Remi Corporations taxable income for the year?

2. Ramsey Corporation sold a building during the year for $990,000. Ramsey bought the building 5 years ago for $820,000 and had claimed $120,000 of depreciation expense through the date of sale. What is the amount and character of income on the sale, assuming this was the only asset Ramsey disposed of during the year?

$232,000 ordinary; $58,000 capital

$24,000 ordinary; $266,000 capital

$290,000 ordinary

$58,000 ordinary; $232,000 capital