This year, Sigma Inc. generated $635,000 income from its routine business operations. In addition, the...
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This year, Sigma Inc. generated $635,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months.
| Initial Basis | Acc. Depr.* | Sale Price | ||||
| Marketable securities | $ | 163,200 | $ | 0 | $ | 57,000 |
| Production equipment | 108,800 | 87,040 | 37,750 | |||
| Business realty: | ||||||
| Land | 186,000 | 0 | 207,000 | |||
| Building | 273,000 | 81,900 | 279,000 | |||
*Through date of sale.
- Compute Sigmas taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.
- Recompute taxable income assuming that Sigma sold the securities for $170,400 rather than $57,000
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