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

question 56

Multiple Choice

Alejandro purchased a building in 1985,which he uses in his manufacturing business.Alejandro used the ACRS statutory rates to determine the cost-recovery deduction for the building.Alejandro's original cost for the building is $500,000 and cost-recovery deductions allowed are $500,000.If the building is sold for $800,000,the tax results to Alejandro are

• A)$500,000 Sec.1245 ordinary income and $300,000 Sec.1231 gain.
• B)$800,000 Sec.1245 ordinary income.
• C)$500,000 Sec.1245 ordinary income and $300,000 Sec.1250 income.
• D)$800,000 Sec.1231 gain.

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Definitions:

Materials Ledger Card

A record-keeping document used in inventory management that tracks the quantities, costs, and transactions related to a particular inventory item.