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Capital Recovery Concept. In 2018 you paid $1 million for a new widget-making machine for...

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Accounting

Capital Recovery Concept.

In 2018 you paid $1 million for a new widget-making machine for your widget-making business. Today, having decided that you need a bigger / faster machine, you sold the used 2018 machine for $550,000. Now assume that, for the years 2018, 2019, and 2020 through the date of sale, you have or will have claimed exactly $600,000 of depreciation deductions related to your $1 million cost basis in the machine. What, if any, income will you re-port based on this sale, and why?

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