Charles owns an office building and land that are used in his trade or business. The office building and land were acquired in 1978 for $800,000 and $100,000, respectively. During the current year, the properties are sold for $900,000 with 20% of the selling price being allocated to the land. The assets as shown on the taxpayer€™s books before their sale are as follows:

a. What is the recognized gain due to the sale of the building?
b. What is the character of the recognized gain due to the sale of the building?
c. What is the recognized gain and character of the gain due to the sale of the land?

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Building S800,000 Accumulated depreciation 690,000 S110,000 Land 100,000