Dorothy operates a pet store as a sole proprietorship.During the year she sells the business to Florian for $200,000.The assets sold and the allocation of the purchase price are as follows:
Dorothy acquired the building in 1997 for $100,000 of which $20,000 was allocated to the land.She paid $40,000 for the equipment in the same year.What are the tax consequences of the liquidation for Dorothy?

Question

Dorothy operates a pet store as a sole proprietorship.During the year she sells the business to Florian for $200,000.The assets sold and the allocation of the purchase price are as follows:  
Dorothy acquired the building in 1997 for $100,000 of which $20,000 was allocated to the land.She paid $40,000 for the equipment in the same year.What are the tax consequences of the liquidation for Dorothy?

Quizplus · Accepted Answer

The Answer of Dorothy operates a pet store as a sole proprietorship.During the year she sells the business to Florian for $200,000.The assets sold and the allocation of the purchase price are as follows:  
Dorothy acquired the building in 1997 for $100,000 of which $20,000 was allocated to the land.She paid $40,000 for the equipment in the same year.What are the tax consequences of the liquidation for Dorothy?

Dorothy Operates a Pet Store as a Sole Proprietorship