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10 November, 05:47

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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  1. 10 November, 06:48
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    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
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Home » Business » 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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