ROBLEM 5

Part 1: An individual taxpayer has the gains and losses shown below. The taxpayer also has $2,000 of 1231 lookback losses. What is the amount and character of the taxpayers net gain or loss for the year?

Holding Period/Property	Character of Gain or Loss	Amount
5 years/vacant land	1231 gain	$8,000
3 years/business equipment	1245 gain	4,200
2 years/publicly traded stock	Long-term capital gain	1,490
7 months/publicly traded stock	Short-term capital loss	(2,850)

Part 2 : The chart below describes the 1231 assets sold by the Blue Company (a sole proprietorship) this year. Compute the gain or loss from each asset disposition and determine the nature of the gain or loss for each individual transaction and the net gain or loss for the Company for the year and the nature of that gain or loss. Assume there is a 1231 lookback loss of $3,000.

Asset	Acquired	Sold	Cost	Acc. Depr.	Sale Price
Stamping machine	3/23/09	8/18/2014	$40,000	$29,736	$32,000
Factory building	2/19/06	7/13/2014	80,000	18,838	90,000
Tractor	5/1/09	11/11/2014	52,000	52,000	30,000
Overhead crane	11/2/01	2/28/2014	74,000	74,000	18,000