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:

Exempt

To free or release from an obligation, requirement, or other restriction, typically used in legal, financial, or regulatory contexts.

Bankruptcy

A legal proceeding involving a person or business that is unable to repay outstanding debts, through which they seek relief from some or all of their debts.

Federal Law

Legislation enacted by the national government and applicable throughout the country.

Unenforceable

Describes a contract or clause that cannot be executed by legal action because of certain legal defenses or barriers.