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Jacob purchased business equipment for $56,000 in 2017 and has taken $35,000 of regular MACRS depreciation. Jacob sells the equipment in 2020 for $26,000. What is the amount and character of Jacob's gain or loss

Respuesta :

Answer:

Ordinary gain = $5,000

Explanation:

Given:

Purchase price of equipment = $56,000

Regular MACRS depreciation = $35,000

Sales price = $26,000

Find:

Gain/Loss

Computation:

Current price of equipment = $56,000 - $35,000

Current price of equipment = $21,000

Ordinary gain = $26,000 - $21,000

Ordinary gain = $5,000