Question 4:

Determine the amount realized and the character by Solar Corporation on the sale of the following equipment:

PV1 purchased in 2012 for $10,000 and sold for $8,000. PV1 has an adjusted basis of $5,000.

PV2 purchased in 2013 for $25,000 and sold for $16,000. PV2 has an adjusted basis of $18,000.

Assume Solar Corporation had ordinary income of $35,000 from all other sources and no other asset sales or transactions. How does the sale of PV1 and PV2 affect ordinary income? Put your answers in Excel.