Aqua Corporation purchases nonresidential real property on May 9 2012
Aqua Corporation purchases nonresidential real property on May 9, 2012, for $1 million. Straight-line cost recovery is taken in the amount of $89,765 before the property is sold on November 30, 2015, for $1.5 million.
a. Compute the amount of Aqua’s recognized gain on the sale of the realty.
b. Determine the amount of the recognized gain that is treated as § 1231 gain and the amount that is treated as § 1250 recapture (ordinary income).
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