S Corp purchased a die maker 6 years ago for $116,750 which is being depreciated straight-line to a salvage value of $4,750 over 7 years. S Corp wants to sell the die maker today for $10,750. S Corp tax rate is 35%. Your boss comes to you to calculate the Book Value and the tax affect on a possible sale of the asset. You tell the boss the Book Value is _(1)___ and the tax affect would be _(2)_____.

		(1) $39,750; (2) Breakeven so no tax affect
		(1) $36,750; (2) $3,500 Depreciation Recapture
		(1) $29,750; (2) $10,750 Capital Gain
		(1) $20,750; (2) $3,500 Capital Loss