Answer:
Truck = Short term capital loss of $8,000
Land = Long term capital gain of $320,000
Machine = Long term capital loss of $125,000
Building = Long term capital gain of $125,000
Net effect Long term capital gain of $125,000
And Short Term Capital Loss of $8,000
Explanation:
As for the provided information we have,
Sale of Trucks within a few months, as purchased in March and sold in June, therefore,
Sale price - Carrying value = $70,000 - $78,000 = -$8,000
Therefore, it is short term capital loss
Sale of land which is 5 years old, therefore, it will be long term.
Sales price - Carrying value = $400,000 - $80,000 = $320,000
Long term capital gain = $320,000
Machines are old and now depreciated, thus it will be long term
Sale price - carrying value = $75,000 - $200,000 = - $125,000 Long term capital loss
Building purchased 8 years ago will be long term in nature, therefore,
Sale price - carrying adjusted basis = $425,000 - $300,000 = $125,000 Long term capital gain.
Final Answer
Truck = Short term capital loss of $8,000
Land = Long term capital gain of $320,000
Machine = Long term capital loss of $125,000
Building = Long term capital gain of $125,000
Net effect Long term capital gain of $125,000
And Short Term Capital Loss of $8,000
