How gain be treated, During the year, Henry, a sole

How gain be treated

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Reference no: EM13153074

During the year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased in 2003 for $50,000, and when it was sold it had an adjusted basis of $30,000. How should this gain be treated?

a) Ordinary income of $35,000

b) Section 1231 gain of $35,000

c) Section 1231 gain of $20,000 and ordinary income of $15,000

d) Section 1231 gain of $15,000 and ordinary income of $20,000

e) None of the above

Reference no: EM13153074

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How gain be treated : During the year, Henry, a sole proprietor, sold for $65,000 a machine that was used in his business. The machine had been purchased in 2003 for $50,000, and when it was sold it had an adjusted basis of $30,000. How should this gain be treated?

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