Required information The following information applies to the questions displaye

Question

Required information The following information applies to the questions displayed below. On August 1 of year O, Dirksen purchased a machine for $33,250 to use in its business. On December 4 of year O, Dirksen sold the machine for $26,000. (Use MACRS Table.) (Loss amounts should be indicated by a minus sign. Do not round percentages used for calculations. Leave no answer blank. Enter zero if applicable.) a. What is the amount and character of the gain or loss Dirksen will recognize on the sale? Description Amount Total Gain/(Loss) Recognized Character of Recognized Gain/(Loss): Ordinary Gain/(Loss) S1231 gain/(loss)

Explanation / Answer

Note:- 12.25%=24.49%X5 ( Half year in year of disposition)

Note: Solution for first Question ia allowed as per Chegg Policy

1(a). Description Amount Amount Realized $26,000 Original Basis $33,250 Accumulated Depreciation $0 Adjusted Basis $33,250 Gain/(Loss) Recognized -$7,250 Ordinary Income (Section1245 Depreciation Recaputre $0 Ordinary Loss -$7,250

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