Question

Leo Gallagher is a traveling comedian, musician, and philosopher. In September of 2019, a truck he had used for several years to transport watermelons for his business was totally destroyed in a sudden accident. His insurance reimbursed him $6,000 for the truck, which had adjusted basis of $5,000 and FMV of $9,000. In addition, he disposed of the following assets during 2019, and they all were solely used in the trade or business:

Asset	Purchased	Sold	Cost	Accumulated Depreciation	Sale Price
Sledge Hammer	3/10/2016	06/17/2019	$3,000	$1,000	$6,000
Office Furniture	7/18/2015	02/02/2019	$20,000	$12,000	$6,000
Equipment	10/14/2017	10/30/2019	$230,000	$11,800	$250,000

For each asset/transaction, list BOTH the amount(s) and the character(s) of any gain(s) or loss(es)

Answer 1

Asset	Purchased	Sold	Cost C	Accumulated Depreciation D	Adjusted basis A=C-D	Sale Price S	Gain/(loss) G=S-D	Depreciation recapture taxed at ordinary rates R	Long term capital gain G-R
Sledge Hammer	03-10-2016	06/17/2019	3000	1000	2000	6000	4000	2000	2000
Office Furniture	7/18/2015	02-02-2019	20000	12000	8000	6000	-2000			-2000	Short term capital loss
Equipment	10/14/2017	10/30/2019	230000	11800	218200	250000	31800	11800	20000
For insurance proceeds received
Proceeds-adjusted basis
6000-5000	1000	long term capital gain
If any doubt please comment