Business, 21.05.2020 03:06 denvontgekingice

Sissie owns two items of business equipment. Both were purchased in 2015 for $100,000, both have a 7-year MACRS recovery period, and both have an adjusted basis of $37,490. Sissie is considering selling these assets in 2019. One of them is worth $60,000, and the other is worth $23,000. Because both items were used in her business, Sissie simply assumes that the loss on one will offset against the gain from the other and that the net gain or loss will increase or reduce her business income.

1. Which of the following must Sissie determine in order to properly handle this transaction? Write "Yes" if she must determine it; otherwise write "NO".

a. Whether she plans to purchase any property during the year.
b. The outcome of the $1231 netting process.
c. Whether the property is a S 1231 asset, a capital asset, or an ordinary asset.
d. Whether $1245 depreciation recapture will apply.

2. What is the amount and character of Sissie's gain or loss for each asset?

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Sissie owns two items of business equipment. Both were purchased in 2015 for $100,000, both have a 7...

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