Determine the amount and the character of recognized gain

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Reference no: EM132660431

Problem - Copper Industries (a sole proprietorship) sold three § 1231 assets during 2019. Data on these property dispositions are as follows:

Asset

Cost

Acquired

Accumulated Depreciation

Sold for

Sold on

Rack

$110,000

10/10/16

$70,000

$55,000

10/10/19

Forklift

45,000

10/16/15

21,000

15,000

10/10/19

Bin

97,000

03/12/18

31,000

60,000

10/10/19

Required -

a. Determine the amount and the character of the recognized gain or loss from the disposition of each asset.

b. Assuming that Copper has $6,000 nonrecaptured net § 1231 losses from prior years, analyze these transactions and determine the amount (if any) that will be treated as a long-term capital gain.

 

Reference no: EM132660431

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