Problem $7-47($LO $7-5)$

Joaquin purchased a $$235,000$ crane for a construction business. The crane was sold for $$175,000$ after taking $$115,000$ of depreciation. Assume Joaquin is in the $35\%$ tax rate bracket.

Required:

On what form would the gain or loss originally be reported?

What is the amount of gain or loss on the sale?

What amount of the gain or loss is subject to ordinary tax rates?