Question: Green Industries (a sole proprietorship) sold three SS1231 assets during 2005.
Data on these property dispositions are as follows:
Asset Cost Acquired Depreciation Sold for Sold on
Rack $100,000 10/10/01 $60,000 $135,000 10/10/05
Forklift $35,000 10/16/02 $23,000 $5,000 10/10/05
Bin $87,000 03/12/04 $34,000 $60,000 10/10/05
a. Determine the amount and the character of the recognized gain or loss from the disposition of each asset.
b. Assuming Green has $5,000 nonrecapture net ss1231 losses from the five prior years, how much of the 2005 recognized gains is treated as capital gains?