McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 14

{Research} On the last day of its current tax year, Buy Rite LLC received $300,000 when it sold a machine it had purchased for $200,000 three years ago to use in its business.At the time of the sale, the basis in the equipment had been reduced to $100,000 due to tax depreciation taken.How much did Buy Rite's self-employment earnings increase when the equipment was sold? { Hint: See §1402(a)(3).