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Davidson Industries, a sole proprietorship, sold the following assets in 2018: AssetCostAcquiredDepreciationSale PriceSale DateWarehouse$140,00010/10/11$24,080$162,0003/15/18Truck21,0001/15/177,56019,6001/14/18Computer23,0007/31/176,09513,6058/31/18 The following questions relate to the sale of the warehouse: (1)
Davidson Industries, a sole proprietorship, sold the following assets in 2018:
AssetCostAcquiredDepreciationSale PriceSale DateWarehouse$140,00010/10/11$24,080$162,0003/15/18Truck21,0001/15/177,56019,6001/14/18Computer23,0007/31/176,09513,6058/31/18
- The following questions relate to the sale of the warehouse:
- (1) What is the adjusted basis of the warehouse?
- (2) What is the realized gain on the warehouse?
- (3) What amount of the gain is taxed according to 1250 rules?
- (4) What amount is considered a 1231 gain before netting?
- The following questions relate to the sale of the truck:
- (1) What is the adjusted basis of the truck?
- (2) What is the realized gain on the truck?
- (3) What amount of the gain is taxed according to 1245 rules?
- (4) What amount of the gain is taxed as ordinary income?
- The following questions relate to the sale of the computer:
- (1) What is the adjusted basis of the computer?
- (2) What is the realized gain or loss on the sale?
- (3) Which IRC section code applies to this asset?
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