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In 2014, Mary sells for $15,000 a machine used in her business. The property was purchased on May 1, 2012, at a cost of $12,500.
In 2014, Mary sells for $15,000 a machine used in her business. The property was purchased on May 1, 2012, at a cost of $12,500. Mary has claimed depreciation on the machine $4,750.
What is the amount and nature of Mary's gain as a result of the sale of the machine?
A. $7,250 Section 1231 gain C. $2,500 ordinary income and $4,750 Section 1231 gain D. $2,500 Section 1231 gain and $4,750 ordinary income under Section 1245 E. None of the above
In 2014, Mary sells for $15,000 a machine used in her business. The property was purchased on May 1, 2012, at a cost of $12,500. Mary has claimed depreciation on the machine $4,750.
What is the amount and nature of Mary's gain as a result of the sale of the machine?
| A. | $7,250 Section 1231 gain | |
| C. | $2,500 ordinary income and $4,750 Section 1231 gain | |
| D. | $2,500 Section 1231 gain and $4,750 ordinary income under Section 1245 | |
| E. | None of the above |
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