Tamara owns a workshop where she purchased equipment for $20,000. Over time, she claimed depreciation of $12,000. In the current year, Tamara sells the asset for $27,000. What is the amount and nature of the gain or loss from the sale? a) $12,000 of ordinary income, $7,000 long-term capital gain b) $15,000 long-term capital gain c) $7,000 of ordinary income, $8,000 long-term capital gain d) $19,000 ordinary income
Tamara owns a workshop where she purchased equipment for $20,000. Over time, she claimed depreciation of $12,000. In the current year, Tamara sells the asset for $27,000. What is the amount and nature of the gain or loss from the sale? a) $12,000 of ordinary income, $7,000 long-term capital gain b) $15,000 long-term capital gain c) $7,000 of ordinary income, $8,000 long-term capital gain d) $19,000 ordinary income
Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization
Section: Chapter Questions
Problem 52P
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What is the amount ans nature of the gain or loss from the sale ?
Transcribed Image Text:Tamara owns a workshop where she purchased equipment
for $20,000. Over time, she claimed depreciation of $12,000.
In the current year, Tamara sells the asset for $27,000. What
is the amount and nature of the gain or loss from the sale?
a) $12,000 of ordinary income, $7,000 long-term capital gain
b) $15,000 long-term capital gain
c) $7,000 of ordinary income, $8,000 long-term capital gain
d) $19,000 ordinary income
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