Question: On January 2, 2009, Bates Corp. purchased and placed into service seven-year MACRS tangible property costing $100,000. On July 31, 2011, Bates sold the property

On January 2, 2009, Bates Corp. purchased and placed into service seven-year MACRS tangible property costing

$100,000. On July 31, 2011, Bates sold the property for

$102,000, after having taken $47,525 in MACRS deprecia936 MODULE 36 TRANSACTIONS IN PROPERTY tion deductions. What amount of the gain should Bates recapture as ordinary income?

a. $0

b. $ 2,000

c. $47,525

d. $49,525

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