Assume the same facts as in Problem 13-56 except the taxpayer is a corporation instead of an individual.
a. What is the recognized gain on the sale of the building and the character of the gain?
b. What is the recognized gain on the sale of the land and the character of the gain?
c. How much of the Sec. 1231 gain is taxed at 25%?
In problem 13-56
Molly, whose tax rate is 39.6%, sells an apartment complex for $4.5 million with 10% of the price allocated to land. The apartment complex was purchased in 1993. She has no other sales or exchanges during the year and no nonrecaptured net Sec. 1231 losses. Information about the assets at the time of sale is:

Building 2,700,000 1,000,000 Land Original Cost Accumulated Depreciation