Problem 17-52 (LO. 7) On August 10, 2015, Jasper purchased business equipment fo

Question

Problem 17-52 (LO. 7) On August 10, 2015, Jasper purchased business equipment for $40,000. On his 2015 tax return, $40,000 of § 179 immediate expense was taken on the equipment. On July 14, 2016, Jasper sold the equipment for $12,000. What is the nature of disposition gain or loss? Where is it reported on the 2016 Form 4797? Refer to Form 4797. The property was not a 6 1231 asset. Therefore, the gain of is treated as ordinary income . As such it is reported on the 2016 Form 4797, Part II, line 10

Explanation / Answer

According to Instructions for Form 4797 such preperty was not a 1231 asset because it is not used for trade by the concerned person.Gain of $12,000 will be treated as ordinary income because of depreciation.

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