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Depreciation Deductions

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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I just looked up the IRS rules that would apply in this case. I would have to assume ...

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.