Siena Industries (a sole proprietorship) sold three § 1231 assets during 2023. Data on these property dispositions are as follows: Accumulated Asset Cost Acquired Depreciation Rack $100,000 10/10/19 Forklift 35,000 10/16/20 87,000 03/12/22 Bin $62,000 23,000 34,000 Sold For Sold On $86,000 10/10/23 4,000 10/10/23 60,000 10/10/23
Siena Industries (a sole proprietorship) sold three § 1231 assets during 2023. Data on these property dispositions are as follows: Accumulated Asset Cost Acquired Depreciation Rack $100,000 10/10/19 Forklift 35,000 10/16/20 87,000 03/12/22 Bin $62,000 23,000 34,000 Sold For Sold On $86,000 10/10/23 4,000 10/10/23 60,000 10/10/23
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 14-72 (LO. 7, 8, 9)
Siena Industries (a sole proprietorship) sold three § 1231 assets during 2023. Data on these property dispositions are as follows:
Accumulated
Cost Acquired Depreciation Sold For Sold On
Asset
Rack $100,000 10/10/19 $62,000 $86,000 10/10/23
Forklift
23,000
4,000 10/10/23
Bin
34,000
60,000 10/10/23
If an amount is zero, enter "0".
a. Determine the amount and the character of the recognized gain or loss from the disposition of each asset.
Total
Amount of
Amount of
§ 1245
Recapture
Gain or Loss
Asset
Rack
Forklift
Bin
Siena has
loss
35,000 10/16/20
87,000
03/12/22
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Character of
Gain or Loss
Ordinary income
§ 1231 loss
Ordinary income
X of ordinary income
7,000
X
X
due to § 1245 recapture and
X
0 ✓
7,000
Balance of
Gain or Loss
0
0
X of § 1231
X
b. Assuming that Siena has no nonrecaptured net § 1231 losses from prior years, analyze these transactions and determine the amount (if
any) that will be treated as a long-term capital gain.
0✔
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