Calculate the taxable income under the throwback rule, Taxation

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This year, the Coral Company Inc. generated $650,000 from its routine business operations. In addition, it sold the following assets, all of which were held for more than 12 months. In addition in the five prior years the company recorded section 1231 losses of $72,000 in total which were never recaptured under the throwback rule. Compute Coral's taxable income for 2012 and the characterization of its section 1231 gains if any.

ASSET

 

      BASIS

 

ACCUM. DEPR.

SALES PRICE

 

EQUIP-P

 

$90,000

 

$25,000

 

$120,0000

 

EQUIP-C

 

450,000

 

100,000

 

450,000

 

FURN.

 

184,000

 

22,000

 

148,000

 

TRANS. EQUIP

800,000

 

640,000

 

240,000

 

LAND-BUS                    280,000                           -0-                        390,000

BLDG*                         700,000                     500,000                     370,000

   *BLDG has $100,000 of accelerated depreciation, which is part of the $500,000 reflected above.


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