On July 3, 2022, Bill sold office equipment (5 year property) that he used in his business for $18,000. He purchased the equipment in June of 2018 for $20,000 and he took MACRS depreciation on the equipment in 2018, 2020and 2021. Based on the information given, please answer the following What was the amount of depreciation taken from 2019 to 2021? What is the book value of the asset on July 3, 2022 (day of the sale)? What is the gain or loss on the sale of the asset? What is the holding period and type of gain? Please show all work and explanations.

On July 3, 2022, Bill sold office equipment (5 year property) that he used in his business for $18,000. He purchased the equipment in June of 2018 for $20,000 and he took MACRS depreciation on the equipment in 2018, 2020and 2021. Based on the information given, please answer the following What was the amount of depreciation taken from 2019 to 2021? What is the book value of the asset on July 3, 2022 (day of the sale)? What is the gain or loss on the sale of the asset? What is the holding period and type of gain? Please show all work and explanations.

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter8: Depreciation And Sale Of Business Property

Section: Chapter Questions

Problem 18P

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