Blue Company, a calendar year taxpayer, purchased new equipment for $2,100,000 on November 1, 2021 that had a $500,000 salvage value. The equipment was considered 5-year property for tax purposes. Blue sells the purchased equipment for $2,100,000 on December 31, 2021. Assuming Blue has $700,000 taxable income for 2021 and Blue maximizes first-year depreciation, compute Blue's realized gain or loss on the equipment sale for 2021, if any. $O Realized gain or loss $1,330,000 Realized gain O $1,400,000 Realized gain $2,100,000 Realized gain
Blue Company, a calendar year taxpayer, purchased new equipment for $2,100,000 on November 1, 2021 that had a $500,000 salvage value. The equipment was considered 5-year property for tax purposes. Blue sells the purchased equipment for $2,100,000 on December 31, 2021. Assuming Blue has $700,000 taxable income for 2021 and Blue maximizes first-year depreciation, compute Blue's realized gain or loss on the equipment sale for 2021, if any. $O Realized gain or loss $1,330,000 Realized gain O $1,400,000 Realized gain $2,100,000 Realized gain
Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 85P
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Transcribed Image Text:Blue Company, a calendar year taxpayer, purchased new equipment for
$2,100,000 on November 1, 2021 that had a $500,000 salvage value. The
equipment was considered 5-year property for tax purposes. Blue sells the
purchased equipment for $2,100,000 on December 31, 2021. Assuming Blue
has $700,000 taxable income for 2021 and Blue maximizes fırst-year
depreciation, compute Blue's realized gain or loss on the equipment sale for
2021, if any.
O $0 Realized gain or loss
O $1,330,000 Realized gain
O $1,400,000 Realized gain
O $2,100,000 Realized gain
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