C Secure htps/newconnect.mheducation.com/flow/connect.html Chapter Ekven Homewor

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C Secure htps/newconnect.mheducation.com/flow/connect.html Chapter Ekven Homework 6 0 Required information The following information applies to the questions displayed below In year O, Longworth Partnership purchased a machine for $40,000 to use in its business In year 3, Longworth sold the Part 2 of machine for $35,000 $22.000 (Loss amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.) 15 b. What is the amount and charecter of the gain (oss) Longworth ll recognize on the sale if the sale proceeds are increased to 45,000 Total Gan(L.oss) Recognized Charadier of Recognized Gainloss) Ordnary Ganvl.oss) 1231 ginloss) Print References Prey 6 Type here to search

Explanation / Answer

Ans :

(b)

S.No Particulars Amount($) Reference 1 Amout realized 45000 given 2 Original basis 40000 given 3 Accumulated depreciation 22000 given 4 Adjusted basis 18000 (2 -3 ) 5 Gain/ (loss) recognized 27000 (1 - 4) 6 Ordinary income (1245 depreciation recapture) 22000 Lesser of 3 and 5 1231 gain 5000 (5 -6 )

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