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Business, 12.04.2021 23:00 maylindominguez

Joanne is in the 24% tax bracket and owns depreciable business equipment that she purchased several years ago for $135,000. She has taken $100,000 of depreciation on the equipment, and it is worth $55,000. Joanne's niece, Susan, is starting a new business and is short of cash. Susan has asked Joanne to gift the equipment to her so that Susan can use it in her business. Joanne no longer needs the equipment. a. Assume Joanne gives the equipment, worth $55,000, to her niece. Ignore any gift tax implications. If Joanne gives the equipment to Susan, in depreciation recapture potential carry over to Susan
b. Assume Joanne decides to sell the equipment to a third party for $55,000 and gives her niece cash instead of the equipment. If Joanne sells the equipment to someone else, she will have cash (after taxes) to give to Susan.

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Joanne is in the 24% tax bracket and owns depreciable business equipment that she purchased several...
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