Ross Purchased a Building in 1985,which He Uses in His

question 25

Multiple Choice

Ross purchased a building in 1985,which he uses in his manufacturing business.Ross uses the ACRS statutory rates to determine the cost-recovery deduction for the building.Ross's original cost for the building is $500,000 and cost-recovery deductions allowed are $500,000.If the building is sold for $340,000,the tax results to Ross are

• A)$340,000 LTCG.
• B)$340,000 Sec.1231 gain.
• C)$340,000 Sec.1245 ordinary income.
• D)$340,000 Sec.1250 ordinary income.

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Definitions:

Operating Activities

The element of a company's cash flow statement that represents the cash flow from regular business operations.

Gain

An increase in wealth or resources, typically recognized when assets are sold for more than their carrying amount.

Current Liabilities

Short-term financial obligations that are due within one year or within the entity's operating cycle.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle if longer.