Q 93

Sammy sells a piece of specialized equipment (with a high resale value)used in his business for $41,650 on September 10,2014.The equipment was purchased on May 20,2011 for $32,000.Sammy has taken $9,200 of depreciation on the equipment.What are the amount and classification of the gain on the sale by Sammy? A) $18,850 Section 1231 gain. B) $9,200 Section 1231 gain and $9,650 Section 1245 ordinary income. C) $9,200 ordinary income under Section 1250 and $9,650 Section 1231 gain. D) $9,200 ordinary income under Section 1245 and $9,650 Section 1231 gain.

Multiple Choice