Question
For each of the following four scenarios, identify the amount and character of the gain or loss: Scenario A: ABC LLC sold a piece of
For each of the following four scenarios, identify the amount and character of the gain or loss:
Scenario A:
ABC LLC sold a piece of land that it uses in its business for $50,000. ABC LLC bought the land two years ago for $40,500. What is the amount and character of the gain or loss?
Scenario B:
Stanley Corporation sold a machine to a machine dealer for $35,000. Stanley Corporation bought the machine for $40,000 several years ago and has claimed $15,000 of depreciation expense on the machine. What is the amount and character of the gain or loss?
Scenario C:
Sunny Corporation sold equipment that it uses in its business for $85,000. Sunny Corporation bought the equipment two years ago for $70,000 and has claimed $20,000 of depreciation expense. What is the amount and character of the gain or loss?
Scenario D:
Sumner sold equipment that is uses in its business for $20,000. Sumner bought the equipment a few years ago for $60,000 and has claimed $20,000 of depreciation expense. What is the amount and character of the gain or loss?
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