1. A taxpayer buys a piece of machinery for$10,000 and takes $4,000 of depreciation over the years. What is the adjusted basis of the asset at that point?
2. If the taxpayer from the previous question sells the asset for $7,500 what is the gross profit on the sale? Assume there are no selling expenses and this is not an installment sale.
3. Suppose selling expenses in the last question were $250, how would that change the previous answer as to the gross profit