99.Suzanne, an individual, began business four years ago and has never sold a § 1231 asset.Suzanne owned each of the assets for several years. In the current year, Suzanne sold thefollowing business assets:Asset Original CostMachineryFurnitureBuilding$12,00010,00090,000AccumulatedDepreciation$7,0002,00020,000Gain/Loss$6,000(3.000)15,000Assuming Suzanne's marginal ordinary income tax rate is 35 percent, what is the character of thegains and losses and what affect do they have on Suzanne's tax liability?

Depreciation is a value obtained from an asset's usual wear and tear. Also, it is an amount kept…

Answered: Assuming Suzanne's marginal ordinary…

Assuming Suzanne's marginal ordinary income tax rate is 35 percent, what is the character of the gains and losses and what affect do they have on Suzanne's tax liability?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

99.
Suzanne, an individual, began business four years ago and has never sold a § 1231 asset.
Suzanne owned each of the assets for several years. In the current year, Suzanne sold the
following business assets:
Asset Original Cost
Machinery
Furniture
Building
$12,000
10,000
90,000
Accumulated
Depreciation
$7,000
2,000
20,000
Gain/Loss
$6,000
(3.000)
15,000
Assuming Suzanne's marginal ordinary income tax rate is 35 percent, what is the character of the
gains and losses and what affect do they have on Suzanne's tax liability?

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