Compute depreciation recapture for sales

Reference no: EM131800631

ABC Inc. sold the following assets this year, all of which had been held more than one year.

	Sales Process	Original Cost	Tax Life/Method	Tax Accum. Depreciation
Furniture	$4,000	$8,500	7-yr MACRS	$3,125
Machine	$9,000	$12,000	7-yr MACRS	$5,700
Building 1	$95,000	$100,000	39-yr SL	$25,530
Building 2	$200,000	$150,000	27.5yr SL	$98,200

a. Calculate gain or loss and compute depreciation recapture for these sales.

b. Does the company have a net §1231 gain or loss. How will this net amount be treated in computing ABC's taxable income?

c. ABC's only capital asset transaction results in a loss on a sale of securities. Is this loss currently deductible if the amount of the loss is:

i. $(89,000)

ii. $(189,000)

Reference no: EM131800631

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