This year, the Coral Company Inc. generated $650,000 from its routine business operations. In addition, it sold the following assets, all of which were held for more than 12 months. In addition in the five prior years the company recorded section 1231 losses of $54,000 in total of which $31,000 was previously recaptured under the look-back.
rule. Compute Corals taxable income for 2012 and the characterization of its section 1231 gains if any.
|
ASSET
|
|
BASIS
|
|
ACCUM. DEPR.
|
SALES PRICE
|
|
EQUIP P
|
|
$90,000
|
|
$25,000
|
|
$120,0000
|
|
|
EQUIP C
|
|
450,000
|
|
100,000
|
|
450,000
|
|
|
FURN.
|
|
184,000
|
|
22,000
|
|
148,000
|
|
|
TRANS EQUIP
|
800,000
|
|
640,000
|
|
240,000
|
|
|
LAND BUS
|
280,000
|
|
-0-
|
|
390,000
|
|
|
BLDG
|
700,000
|
|
500,000
|
|
370,000
|
|
BLDG has $100,000 of accelerated depreciation, which is part of the $500,000 reflected above.