Ed, an individual, is selling his business for $100,000. The adjusted basis and fair market value (FMV) for each asset sold is as follows:

Adjusted Basis FMV

Inventory $10,000 $18,000

Machinery/Equipment

Cost: $15,000

Depreciation ($3,000) $12,000 $14,000

Furniture

Cost $10,000

Depreciation ($4,000) $ 6,000 $12,000

Building

(only straight line depreciation claimed) $15,000 $20,000

Land Parking Lot $25,000 $20,000

Goodwill -0- $16,000

The buyer pays the full purchase price of all assets. All assets had been held by Ed for at least one year.

a. How much gain or loss is realized on each asset?

b. What is the character of gain or loss on each asset?

c. What is the total amount of section 1231 gain or loss?

d. What is the total amount of ordinary income?

e. What is the total amount of capital gain or loss?