Federal Taxation 1

Butte sold a machine to a machine dealer for $51,200. Butte bought the machine for $53,800 several years ago and has claimed $11,900 of depreciation expense on the machine. What is the amount and character of Butte's gain or loss?

Multiple Choice

• $9,300 capital gain.

• None of the choices are correct.

• $9,300 ordinary gain.

• $9,300 1231 loss.

• $2,600 1231 loss.