In 2013,Tim Sells Section 1245 Property for $28,000 That He

question 87

Multiple Choice

In 2013,Tim sells Section 1245 property for $28,000 that he had purchased in 2007.Tim has claimed $5,000 in depreciation on the property and originally purchased it for $15,000.How much of the gain is taxable as ordinary income?

• A)$5,000
• B)$8,000
• C)$18,000
• D)$13,000
• E)None of the above is correct

---

Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful comparison for actual versus budgeted performance.

Budgeted Costs

Estimated financial plan for expenditures over a specified period.

Direct Labor Hours

This term represents the total time spent by workers directly involved in the manufacturing process.

Flexible Budget Graph

A visual representation that shows the difference between actual and expected performance at various levels of activity.