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Equipment MACRS Year Property Cost Accumulated Depreciation Sales Price Luxury Car 5 Year Property $36,000 $12,000 $20,000 Computer 5 Year Property $1,200 $1,200 $200 Furniture

Equipment

MACRS Year Property

Cost

Accumulated Depreciation

Sales Price

Luxury Car

5 Year Property

$36,000

$12,000

$20,000

Computer

5 Year Property

$1,200

$1,200

$200

Furniture

7 Year Property

$25,000

$20,000

$10,000

  1. What will be the tax treatment as follows for the sale of the Luxury Car
    1. Calculate the Realized Gain or Loss (5pts):

  1. What will be the character and amount of the Recognized gain? (10 pts)

Character= Ordinary Income

Recognized Gain= $5,000

Luxury Car

Code Section

Character

Amount

1231

1245

1250

  1. What will be the tax treatment as follows for the sale of the Computer?
    1. Calculate the Realized Gain or Loss (5 pts):

  1. What will be the character and amount of the Recognized gain? (10 pts)

Computer

Code Section

Character

Amount

1231

1245

1250

  1. What will be the tax treatment as follows for the sale of the Furniture
    1. Calculate the Realized Gain or Loss (5 pts):

  1. What will be the character and amount of the Recognized gain? (10 pts)

Furniture

Code Section

Character

Amount

1231

1245

1250

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