[Sticky] During the current year, Hugo sells equipment for $150,000.  

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Raj Maurya
(@rajmaurya)
Member Admin
Joined: 2 years ago
Posts: 8
11/02/2019 3:15 pm  

During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are (how much gain and what rate is it taxed at)?


Solution

ParticularsAmount
Equipment Cost$175,000
Less: Allowed Depreciation$55,000
Total Value of Assets$120,000
Selling price of Equipment$150,000
Income from sell of Equipment$30,000

So, According to Section 1245 generate ordinary income of $30,000.


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