Moab Inc. manufactures and distributes high-tech biking gadgets. It has decided
ID: 2593182 • Letter: M
Question
Moab Inc. manufactures and distributes high-tech biking gadgets. It has decided to streamline some of its operations so that it will be able to be more productive and efficient. Because of this decision it has entered into several transactions during the year.
Moab Inc. sold a machine that it used to make computerized gadgets for $27,300 cash. It originally bought the machine for $19,200 three years ago and has taken $8,000 depreciation.
Moab Inc. held stock in ABC Corp. which had a value of $12,000 at the beginning of the year. That same stock had a value of $15,230 at the end of the year.
Moab Inc. sold some of its inventory for $7,000 cash. This inventory had a basis of $5,000.
Moab Inc. disposed of an office building with a fair market value of $75,000 for another office building with a fair market value of $55,000 and $20,000 in cash. It originally bought the office building seven years ago for $62,000 and has taken $15,000 in depreciation.
Moab Inc. sold land it held for investment for $28,000. It originally bought the land for $32,000 two years ago.
Moab Inc. sold another machine for a note receivable in four annual installments of $12,000. The first payment was received in the current year. It originally bought the machine two years ago for $32,000 and had claimed $9,000 in depreciation expense against the machine.
Moab Inc. sold stock it held for eight years for $2,750. It originally purchased the stock for $2,100.
Moab Inc. sold another machine for $7,300. It originally purchased this machine six months ago for $9,000 and has claimed $830 in depreciation expense against the asset 1. Complete Moab Inc.’s Form 4797 for the year.
Moab’s Inc's identifying number: 57-1234567
4797 Page1 4797 Page 2 Form 4797 Sales of Business Property (Also Involuntary Conversions and Recapture Amounts Under Sections 179 and 280F(b)(2)) OMB No. 1545-0184 2015 Department of the Treasury Intemal Rewenue Attachment Sequence No 27 Form 4797 Name(5) shown Enter the gross proceeds from sales or exohanges reported to you for 2015 on Formss) 1099-B or 1099-Sor substtute stalement) that you Part I Sales or Exchanges of Property Used In a Trade or Busliness and Involuntary Converslons From other Than Casuaity or Theft -Most Held More Than 1 Year (8ee Instructions) 1 Descrption of propety e) Deprecaton ost or other basis alowed or alowabie Gain or (loss and lb) Data acquiad(yyy Date aid Cyyyy) (d) Greea sa as price pius im Subract fn) from the Gain, if any, from Form 4084, line 39 4 Section 1231 gin from istalment sales from Fom 8252, ine 28 or 37 5 Section 1231 gain or 005 from 'tond erharges from Form 8824 6 Gain, f any, from ine 32, trom other than casualty or thet 7Combine inas 2 trough &. Entor the gain or [loas) haro and on the appropriate ine as foilows Partershipa (axclecting larga partnarshipa) and S corporations. Raport the gain or (loas) olowing the instructions for Fom 1065 Schedule K, 'ne la or Form 1 120S, Schedule K, Ine 9. Skip lines 8, 9, 11, and 12 bek w Indiidats, partners. S cer oraton shareholders, and al others. If ine 7 zero ora loss, enter the amount from 'ne 7 on ine 11 below and lines 8 and 9. If ine 7s a gain and you did not hawe ay prior yoar section 1231 losses or thay ware recaptared in an earnliar year, entar the gar, forn inea* a longterm capital gain on the Shedd. D fled with your return and skbirwe 8.9. 11,and 12 below nrecaptured net 5edon 1231 losses from prior years(see netructions) subtract Ine e tom "ne 7. "zero or lesa, emer 0.Iflne 9 s zern enter the galnfrom line 7 on line 12 below. 8 9 Irine 9 more than zero. the amouont from ine 8 on ine 12 below and enter the gain from line 9 as a long-term capital gain on the Schedule Dfled with your retuam Part II Ordinary Gains and L08808 (8ee Instructions) 1Los8, if arry, tom ineT 12 Gan my, tom nneor amount from .ne 8, tf app icable 3 Gain, 14 Net gain or(loss from Form 4684, IInes 31 and 3a 15 adnary gain from iratal ment sa es tom Farm e252, lin 25 or 36 18 Ordinay gain or loesfrom lke-kind exchanges fom Fom 8824 17 Combine ines 10 through 16 18 For all ecept indMidual retums, enter the amount from line 17 on the appropriate line of your etum and skip lines a and b below. For individu returns, complete nes nd b below: the loos on .ne 11 inoudes b58 from Form 4684-ne 35. oolmn(tw. emerthat pol of te b65 here. Ertere part of the loss from nd the port of te behom property See instructions produong property on Schedule A(Form 1040. 'ne 28. ed as an employee on Schedule A(Form 1040) Ine 23 Identty as from T om 4797, Ine 18 b Redetermine the gain or doss) on line 17 xclding the loss, any, on ine 18a. Enter here and on Fom 1040, line 14 Paperwork 18 A &MULATION; OFA TAX FILING8 IT BELF. DON 2018 MoGrawH Education. E THIS FORM FOR 8 OR FOR ANY PURPO8E 4737 Page 1 4797 Page 2Explanation / Answer
Part I Machinery
Gain from Machinery 2
Stock (more than 1 year)
2750
Land
Office building
Less than one year gain
Machinery
Sale Consideration 7300
Cost 9000
Depreciation. 830
Adjusted cost 8170
Loss on sale 870
Inventory
Sale. 7000
Cost. 5000
Gain. 2000
Stock
Sale Consideration 15230
Cost. 12000
Gain. 3230
As the form is not clear I worked out separately
Gain from Machinery 1 Sale Consideration 27300 Cost of Machinery 19200 Less : Depreciation 8000 Net cost 11200 Net Gain 16200