Lena is a sole proprietor. In April of this year, she sold equipment purchased four years ago for $26,000 with an adjusted basis
of $15,500 for $17,000. Later in the year, Lena sold another piece of equipment purchased two years ago with an adjusted basis of $8,200 for $5,500. What are the tax consequences of these tax transactions? Lena has Selecta:
(capital gain, a capital loss, an ordinary gain, an ordinary loss) of $_______ from the sale of the first equipment.
Lena has Selecta:___________.
Lena has a ORDINARY GAIN of $1,500 from the sale of the first equipment.
Lena has a ORDINARY LOSS of $2,700 from the sale of the second equipment.
Explanation:
Lena sold the first equipment for $17,000, and that resulted in an ordinary gain = $17,000 - $15,500 = $1,500. This gain was due to a §1245 depreciation recapture.
Lena sold the second equipment for $5,500, and that resulted in an ordinary loss (§1231 loss) = $5,500 - $8,200 = $2,700.
Rose argues that the last part of a presentation should wrap it up and give the final pitch. One should highlight the crucial points as to why a Venture Capitalist would want to invest in your business,
The answer is : Elastic Demand. The elasticity of demand shows the responsiveness of the quantity demanded to the change in price. An elastic demand means that the demand is affected by changes in price. While an inelastic demand means that the supply is not affected by changes in price at all.
Depreciation is the reduction in the value of an asset over time due to regular wear and tear. Straight - line depreciation is where the same amount is reduced every year over the life of the asset. It is calculated as (Cost of asset - residual value) / number of useful life years
