Frank purchased equipment for $50,000 on March 1, 2014. As of today, Frank has taken...
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Accounting
Frank purchased equipment for $50,000 on March 1, 2014. As of today, Frank has taken $20,000 of depreciation deductions on the equipment. Due to current market conditions, Frank decides to sell the equipment because he can sell it now for $60,000. How much and what type of gain does Frank recognize when he sells the equipment now?
| a. | $30,000 ordinary income | |
| b. | $30,000 long-term capital gain | |
| c. | $20,000 long-term capital gain and $10,000 ordinary income | |
| d. | $10,000 long-term capital gain and $20,000 ordinary income |
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