ACCT 407/607 - Federal Taxation Chapter 14 Example Michael had the following sales of assets in 2021. Assume all fixed assets and land were use in a trade or business. The Accumulated Depreciation column reflects the correct depreciation through the date of sale. Calculate Michael's income for the year and indicate its character. Michael had a net 1231 loss in 2014 of $4,000, a net 1231 loss of $5,000 in 2018, net 1231 income of $3,000 in 2019. Adjusted Basis Gain (Loss) GE Stock Computer Rocket Launcher Tank #1 Building #1 Land Tank #2 Equipment #2 Boeing Stock Date Placed in Service 5/8/20 2/22/19 6/28/18 7/17/20 8/1/06 8/16/97 10/1/20 8/11/18 8/26/98 Date Sold 3/3/21 5/16/21 6/16/21 4/17/21 5/1/21 5/11/21 7/8/21 1/15/21 5/11/21 Initial Basis 34,000 3,000 14,500 27,000 140,000 40,000 80,000 9,500 15,000 Accum. Depreciation N/A 2,600 10,200 21,000 14,000 N/A 1,500 5,200 N/A Sale Price 21,000 1,500 17,500 3,800 132,000 68,000 80,000 3,700 24,000 Ordinary Income or (Loss) Section 1231 Gain or (Loss) Capital Gain or (Loss) GE Stock Computer Rocket Launcher Tank #1 Building #1 Land Tank #2 Equipment #2 Boeing Stock ACCT 407/607 - Federal Taxation Chapter 14 Example Michael had the following sales of assets in 2021. Assume all fixed assets and land were use in a trade or business. The Accumulated Depreciation column reflects the correct depreciation through the date of sale. Calculate Michael's income for the year and indicate its character. Michael had a net 1231 loss in 2014 of $4,000, a net 1231 loss of $5,000 in 2018, net 1231 income of $3,000 in 2019. Adjusted Basis Gain (Loss) GE Stock Computer Rocket Launcher Tank #1 Building #1 Land Tank #2 Equipment #2 Boeing Stock Date Placed in Service 5/8/20 2/22/19 6/28/18 7/17/20 8/1/06 8/16/97 10/1/20 8/11/18 8/26/98 Date Sold 3/3/21 5/16/21 6/16/21 4/17/21 5/1/21 5/11/21 7/8/21 1/15/21 5/11/21 Initial Basis 34,000 3,000 14,500 27,000 140,000 40,000 80,000 9,500 15,000 Accum. Depreciation N/A 2,600 10,200 21,000 14,000 N/A 1,500 5,200 N/A Sale Price 21,000 1,500 17,500 3,800 132,000 68,000 80,000 3,700 24,000 Ordinary Income or (Loss) Section 1231 Gain or (Loss) Capital Gain or (Loss) GE Stock Computer Rocket Launcher Tank #1 Building #1 Land Tank #2 Equipment #2 Boeing Stock