Depreciation Deductions
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During the current year, Hugo sells equipment for $150,000, which it placed in service in 2009. The equipment cost $175,000, and $55,000 of depreciation deductions was allowed. The results of the sale are
A. LTCG of $30,000.
B. Sec. 1231 gain of $30,000.
C. Sec. 1245 ordinary income of $30,000.
D. Sec. 1250 ordinary income of $30,000.
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Solution Summary
This solution explains which result is the proper result of Hugo's equipment sale. The equipment was placed in service in 2009 with a cost of $175,000. The applicable IRS tax code is also referenced.
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