Problem
In December 2013, your client, a single individual operating a CPA firm as a sole proprietorship sold the following business assets:
Property Acquisition date Sales Price Original Cost Cost Recovered
|
Property
|
Acquisition date
|
Sales Price
|
Original Cost
|
Cost Recovered
|
|
39 year property
|
2/2011
|
$150,000
|
$140,000
|
$8,150
|
|
3 year property
|
5/2011
|
18,000
|
20,000
|
15,140
|
|
5 year property
|
9/2011
|
15,000
|
40,000
|
17,900
|
|
7 year property
|
10/2011
|
120,000
|
100,000
|
38,250
|
|
IBM stock
|
12/2011
|
2,000
|
1,000
|
0
|
The only other business assets ever sold were in 2010, resulting in a net loss of $2,000.
Assuming that there are no other transactions and the cost recovery for each asset is correct as of its sale date, determine the amount and character (including any relevant tax rates) of your client's recognized gain or loss from the above transactions.