During 2018, Paul sells residential rental property for $290,000, which he acquired in 1997 for $145,000. Paul
Question:
During 2018, Paul sells residential rental property for $290,000, which he acquired in 1997 for $145,000. Paul has claimed straightline depreciation on the building of $54,500. What is the amount and nature of Paul’s gain on the sale of the rental property?
a. $189,500 Section 1231 gain
b. $145,000 Section 1231 gain, $54,500 “unrecaptured depreciation”
c. $54,500 Section 1231 gain, $189,500 ordinary income
d. $135,000 Section 1231 gain, $54,500 “unrecaptured depreciation”
e. None of the above
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Related Book For
Income Tax Fundamentals 2019
ISBN: 9781337703062
37th Edition
Authors: Gerald E. Whittenburg, Steven Gill
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