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:

MRP Curve

Represents the Marginal Revenue Product curve, showing the additional revenue generated by employing one more unit of input, like labor or capital.

Resource Demand

The need or desire for specific resources (labor, capital, land, etc.) driven by businesses and individuals in the production of goods and services.

MRC

The marginal rate of change, representing how a variable changes as another variable (typically quantity) increments by one unit.

MRP

Marginal Revenue Product; the additional revenue generated from employing one more unit of a resource, a key concept in labor economics and the theory of firm.