Brandon, an individual, began business four years ago and has sold §1231 assets

Question

Brandon, an individual, began business four years ago and has sold §1231 assets with $5,200 of losses within the last 5 years. Brandon owned each of the assets for several years. In the current year, Brandon sold the following business assets: Original Accumulated Asset Cost Depreciation Gain/Loss Machinery $30,400 Land 44,000 98,000 7,400$10,200 0 22,000 24,000 (9,000) Building Assuming Brandon's marginal ordinary income tax rate is 35 percent, what effect do the gains and losses have on Brandon's tax liability?

Explanation / Answer

23200 Gain and 8120 Tax

therefore the answer is none of the above.

10200+22000-9000=23200Gain

23200*35%=8120TAX

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