You must apple the tax law in effect for tax year 2023( even though we must use the 2022 forms and schedules because not all of the 2023 forms and schedules are available at this time) and you must assume you are preparing the return in April 2024.

11. The taxpayer owns a sole proprietorship and sells only 1 piece of equipment during the year. The equipment was purchased 3 years ago for $90,000. The equipment was sold on September 1, 2023 for $70,000. The combination of Section 179 expense and MACRS depreciation taken on the equipment through the date of sale was $40,000. Which of the following would be a correct entry on the tax return based solely on this information? a. $40,000 on Form 4797, Part III, Line 23 (for Property A). b. $20,000 on Form 4797, Part II, Line 13. c. ($3,000) on Form 1040, Line 6. d. $20,000 on Schedule D. Part II, Line 11.