Answer : Gain on sale if Equipment = $13,000 It is Short term Capital Gain
Working notes for the above answer is as under
| Renata Corporation | Amount in $ |
| purchased equipment in 2013 | 180,000 |
| regular MACRS depreciation taken | 83000 |
| WDV as per MACRS method | 97,000 |
| Less: | |
| Sell the equipment for 110,000 | 110,000 |
| gain on sale of equipment | 13,000 |
