A taxpayer acquired a piece of equipment for $20,000. Over time, depreciation of $8,000 was claimed. In the current year, the taxpayer sells the asset for $25,000. What is the amount and nature of the gain/loss from the sale? a) $8,000 ordinary income, $5,000 long-term capital gain b) $5,000 long-term capital gain, $5,000 ordinary income c) $13,000 ordinary income d) $13,000 long-term capital gain
A taxpayer acquired a piece of equipment for $20,000. Over time, depreciation of $8,000 was claimed. In the current year, the taxpayer sells the asset for $25,000. What is the amount and nature of the gain/loss from the sale? a) $8,000 ordinary income, $5,000 long-term capital gain b) $5,000 long-term capital gain, $5,000 ordinary income c) $13,000 ordinary income d) $13,000 long-term capital gain
Chapter17: Property Transactions: § 1231 And Recapture Provisions
Section: Chapter Questions
Problem 27CE
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Please need answer the general accounting question
Transcribed Image Text:A taxpayer acquired a piece of equipment for $20,000. Over time,
depreciation of $8,000 was claimed. In the current year, the
taxpayer sells the asset for $25,000. What is the amount and
nature of the gain/loss from the sale?
a) $8,000 ordinary income, $5,000 long-term capital gain
b) $5,000 long-term capital gain, $5,000 ordinary income
c) $13,000 ordinary income
d) $13,000 long-term capital gain
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