Moab Inc manufactures and distributes hightech biking gadget

Moab Inc. manufactures and distributes high-tech biking gadgets. It has decided to streamline some of its operations so that it will be able to be more productive and efficient. Because of this decision it has entered into several transactions during the year. (Do not round intermediate computations.)

Moab Inc. sold a machine that it used to make computerized gadgets for $27,300 cash. It originally bought the machine for $19,200 three years ago and has taken $8,000 depreciation.

Moab Inc. held stock in ABC Corp. which had a value of $12,000 at the beginning of the year. That same stock had a value of $15,230 at the end of the year.

Moab Inc. sold some of its inventory for $7,000 cash. This inventory had a basis of $5,000.

Moab Inc. disposed of an office building with a fair market value of $75,000 for another office building with a fair market value of $55,000 and $20,000 in cash. It originally bought the office building seven years ago for $62,000 and has taken $15,000 in depreciation.

Moab Inc. sold some land held for investment for $28,000. It originally bought the land for $32,000 two years ago.

Moab Inc. sold another machine for a note payable in four annual installments of $12,000. The first payment was received in the current year. It originally bought the machine two years ago for $32,000 and has claimed $9,000 in depreciation expense against the machine.

Moab Inc. sold stock it held for eight years for $2,750. It originally purchased the stock for $2,100.

Moab Inc. sold another machine for $7,300. It originally purchased this machine six months ago for $9,000 and has claimed $830 in depreciation expense against the asset.

I also need help filling out form 4797.

. Determine the gain/loss realized and recognized in the current year for each of the events provided above. Also determine whether the gain/loss recognized is 51231, capital, or ordinary. (Do not round intermediate computations.) Realized Recognized 51245 Ordinary 291 Ordinary | S1231 Ordinary Capital Asset eGain/(Loss) Gain/(Loss)Income Income Gain/(Loss) Income/(Loss) Gain/(Loss) 1a 1d 1e9 1f 1g 1h Totals $

Solution

* Moab recognizes $20000 gain due to the boot received in the like exchange . The remaining gain is deferred.

** $13000 recognized gain consists of $9000 depreciation recapture ( required to be recognized in year of sale and not eligile for installment sale treatment) and $4000 [($16000 remaining gain / $48000 amount realized) * $12000 cash received in year of sale] .

(2).

(1)

Asset	Realized Gain / loss	Recognized gain/loss	Character
1a	$16100	$16100	$8000 of 1245 recapture ; $ 8100 1231 gain
1b	0	0	no realisation
1c	2000	2000	ordinary income
1d	28000	20000*	$3000 291 recapture ; $17000 1231 gain
1e	(4000)	(4000)	long term capital loss
1f	25000	13000**	$9000 1245 recapture ; $4000 1231 gain
1g	650	650	long term capital gain
1h	(870)	(870)	ordinary loss ; not held more than 12months