LO. 9 Renata Corporation purchased equipment in 2017 for $180,000 and has taken $83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2019 for $110,000. What is the amount and character of Renata's gain or loss?

Question

Business

Miracle Friedman

14 June, 02:39

LO. 9 Renata Corporation purchased equipment in 2017 for $180,000 and has taken $83,000 of regular MACRS depreciation. Renata Corporation sells the equipment in 2019 for $110,000. What is the amount and character of Renata's gain or loss?

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Clover · Answer 1

It will be considered a long-term capital gains as Renata Corporation holded for a priod of time longer than a year.

The gain will be the difference between tax basis (cost - tax purporse depreciation) which amount to $13,000

Explanation:

selling price 110,000

180,000 - 83,000 = 97,000 tax basis

long. term capital gain 13,000