10) Brandon, an individual, began business 4 years ago and has sold 1231 assets with 5,450 of losses within the last five years. Brandon owned each of these assets for several years, in the current year, Brandon sold the following business assets:

Asset Original Cost Accumulated Depreciation Gain/Loss

Machinery 30,900 7,900 10,450

Land 49,000 0 24,500

Buiding 108,000 29,000 (14,000)

Assuming Brandon's marginal ordinary income tax is 32% what effect do the gains and losses have on Brandon's tax liability?

The answer is 7,600 1231 Gain, 13,350 ordinary income & 5,412 tax liability

How do you arrive at this answer?