A Retail Building Used in the Business of a Sole

question 29

Multiple Choice

A retail building used in the business of a sole proprietor is sold on March 10, 2014, for $342,000. The building was acquired in 2004 for $400,000 and straight-line depreciation of $104,000 had been taken on the building. What is the maximum unrecaptured § 1250 gain from the disposition of this building?

• A) $400,000.
• B) $322,000.
• C) $104,000.
• D) $26,000.
• E) None of the above.

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Definitions:

Invoice Terms

Conditions specified on an invoice, including payment deadlines, cash discount opportunities, and penalties for late payment.

Replacement Cost

The cost to replace an asset with another of similar function and quality in its current condition.

Historical Cost

The original monetary value of an asset or expense as recorded at the time of acquisition or incurrence, without adjusting for inflation or changes in value.

Fair Value

An estimate of the price at which an asset or liability could be traded in a fair transaction between willing parties, not involving forced sale or liquidation.