Eric Purchased a Building in 2008 That He Uses in His

question 48

Multiple Choice

Eric purchased a building in 2008 that he uses in his business.Eric uses the straight-line method for the building.Eric's original cost for the building is $420,000 and cost-recovery deductions are $120,000.Eric is in the top tax bracket and has never sold any other business assets.If the building is sold for $560,000,the tax results are

• A)$260,000 Sec.1231 gain,all taxable at 20%.
• B)$260,000 unrecaptured Sec.1250 gain,all taxable at 25%.
• C)$260,000 Sec.1231 gain,of which $120,000 is unrecaptured Sec.1250 gain taxable at 25% and the $140,000 balance is taxable at 20%.
• D)$120,000 Sec.1245 ordinary income,$140,000 Sec.1231 gain taxable at 20%.

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Definitions:

Operational Goal

An operational goal is a short-term, specific objective that is designed to achieve operational outcomes and improve the efficiency of an organization.

Competitive Task

An activity or assignment in which participants compete against each other to achieve a goal or superior performance.

Group Goal

A target or objective sought by a collective group, which guides its actions and efforts.

Heterogeneous Goals

refer to objectives or aims that vary greatly among individuals or groups, often leading to diverse motivations and outcomes.