Ford purchased material handling equipment for its Fusion (car) assembly line on November 19, 2018 for $45,000. It later sold the equipment on April 15, 2020 after posting a $1,000 advertisement in a manufacturing magazine with the details on the equipment for sale. The buyer paid $27,000 in cash for the handling equipment. Assume the depreciation able to be claimed for the equipment was $4,000, $6,000, and $6,000 in 2018, 2019, and 2020, respectively. Further, assume the company had no prior unrecaptured net Sec. 1231 losses in years 2015-2019.

A)Fill in the blank: The amount of the total gain (or loss) Ford will recognize on the sale is $_______. Reminder: If the amount represents gain, this is entered as a positive value (e.g. syntax: a $5,000 gain amount should be entered as 5000) whereas if the amount represents a loss this is entered as a negative value (e.g. syntax: a $5,000 loss amount should be entered as -5000). What is the character of the gain (or loss) Ford will recognize on the sale?

b) Fill in the blank: The amount of the total gain (or loss) Ford will recognize on the sale if the amount of cash paid by the buyer changed to $35,000 instead is $_______.

Reminder: If the amount represents gain, this is entered as a positive value (e.g. syntax: a $5,000 gain amount should be entered as 5000) whereas if the amount represents a loss this is entered as a negative value (e.g. syntax: a $5,000 loss amount should be entered as -5000).

c) Fill in the blank: Of the amount of the total gain (or loss) Ford will recognize on the sale if the amount of cash paid by the buyer changed to $35,000, $_______ should be treated as ordinary income.

Note: If none of that amount should be treated as ordinary income, enter 0 without quotations.

d)Fill in the blank: Of the amount of the total gain (or loss) Ford will recognize on the sale if the amount of cash paid by the buyer changed to $35,000, $_______ should be treated as long-term capital gain.

Note: If none of that amount should be treated as long-term capital gain, enter 0 without quotations.

F) Fill in the blank: The amount of the total gain (or loss) Ford will recognize on the sale if the amount of cash paid by the buyer changed to $50,000 instead is $_______.

Reminder: If the amount represents gain, this is entered as a positive value (e.g. syntax: a $5,000 gain amount should be entered as 5000) whereas if the amount represents a loss this is entered as a negative value (e.g. syntax: a $5,000 loss amount should be entered as -5000).