On December 1, 2015, Bernadine sold a Machine for $100,000. The Machine had originally cost $140,000 and, over the years, Bernadine had claimed $60,000 in depreciation.

How much gain will Bernadine recognize on the sale of the Machine?

How much of the gain will be taxed at ordinary income rates? (section 1245 recapture).

How much of the gain will be taxed at capital gains (15%) rates?

Income Tax Question