What effect do the gains have on brandon tax liability

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Brandon, an individual, began business four years ago and has sold §1231 assets with $5,600 of losses within the last 5 years. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets:

Asset                              Original                    Accumulated              Gain/Loss
                                     Cost                    Depreciation
Machinery                      $31,200                 $8,200                       $10,600
Land                               52,000                     0                           26,000
Building                          114,000                    32,000                     (17,000)

Problem 1: Assuming Brandon's marginal ordinary income tax rate is 32 percent, what effect do the gains and losses have on Brandon's tax liability?

Reference no: EM132990410

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