Question

During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are Select one: a. Sec. 1231 gain of $30,000. b. Sec. 1245 ordinary income $30,000. c. Sec. 1250 ordinary income of $30,000 d. LTCG of $30,000.

Name: during the current year hugo sells equipment for 150000 the equipment cost 175000 when placed in service two years ago and 55000 of depreciation deductions were allowed the results of the sa 72082
Uploaded: 2023-11-18T23:26:23-08:00
Duration: 2 min 19 s
Channel: Akash M
Description: during the current year hugo sells equipment for 150000 the equipment cost 175000 when placed in service two years ago and 55000 of depreciation deductions were allowed the results of the sa 72082

          During the current year, Hugo sells equipment for $150,000. 
The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. 
The results of the sale are
Select one:
a.
Sec. 1231 gain of $30,000.
b.
Sec. 1245 ordinary income $30,000.
c.
Sec. 1250 ordinary income of $30,000
d.
LTCG of $30,000.

Added by Michelle R.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Akash M

11/18/2023

Step 1

- The original cost of the equipment is $175,000. - Depreciation deductions allowed are $55,000. - Adjusted basis = Original cost - Depreciation = $175,000 - $55,000 = $120,000. Show more…

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During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are Select one: a. Sec. 1231 gain of $30,000. b. Sec. 1245 ordinary income $30,000. c. Sec. 1250 ordinary income of $30,000 d. LTCG of $30,000.