TAXPAYER HAS A WAREHOUSE WHERE SHE ACQUIRED EQUIPMENT FOR $24,000. OVER TIME, DEPRECIATION OF $15,000 WAS CLAIMED. IN THE CURRENT YEAR, TAXPAYER SELLS THE ASSET FOR $28,000. WHAT IS THE AMOUNT AND NATURE OF THE GAIN/LOSS FROM THE SALE? A. $15,000 OF ORDINARY INCOME, $4,000 LONG TERM CAPITAL GAIN B. $19,000 LONG TERM CAPITAL GAIN C. $4,000 OF LONG-TERM CAPITAL GAIN, 12,000 OF ORDINARY INCOME D. $19,000 ORDINARY INCOME
TAXPAYER HAS A WAREHOUSE WHERE SHE ACQUIRED EQUIPMENT FOR $24,000. OVER TIME, DEPRECIATION OF $15,000 WAS CLAIMED. IN THE CURRENT YEAR, TAXPAYER SELLS THE ASSET FOR $28,000. WHAT IS THE AMOUNT AND NATURE OF THE GAIN/LOSS FROM THE SALE? A. $15,000 OF ORDINARY INCOME, $4,000 LONG TERM CAPITAL GAIN B. $19,000 LONG TERM CAPITAL GAIN C. $4,000 OF LONG-TERM CAPITAL GAIN, 12,000 OF ORDINARY INCOME D. $19,000 ORDINARY INCOME
Chapter11: Investor Losses
Section: Chapter Questions
Problem 64P
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Transcribed Image Text:TAXPAYER HAS A WAREHOUSE WHERE SHE ACQUIRED
EQUIPMENT FOR $24,000. OVER TIME, DEPRECIATION OF
$15,000 WAS CLAIMED. IN THE CURRENT YEAR, TAXPAYER
SELLS THE ASSET FOR $28,000. WHAT IS THE AMOUNT AND
NATURE OF THE GAIN/LOSS FROM THE SALE?
A. $15,000 OF ORDINARY INCOME, $4,000 LONG TERM
CAPITAL GAIN
B. $19,000 LONG TERM CAPITAL GAIN
C. $4,000 OF LONG-TERM CAPITAL GAIN,
12,000 OF ORDINARY INCOME
D. $19,000 ORDINARY INCOME
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