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This year, Sigma Inc. generated $635,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held

This year, Sigma Inc. generated $635,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months.

Initial Basis Acc. Depr.* Sale Price
Marketable securities $ 163,200 $ 0 $ 57,000
Production equipment 108,800 87,040 37,750
Business realty:
Land 186,000 0 207,000
Building 273,000 81,900 279,000

*Through date of sale.

  1. Compute Sigmas taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.
  2. Recompute taxable income assuming that Sigma sold the securities for $170,400 rather than $57,000.

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