Marta Purchased Residential Rental Property for $600,000 on January 1

question 276

Multiple Choice

Marta purchased residential rental property for $600,000 on January 1, 1985. Total ACRS deductions for 1985 through the date of sale amounted to $600,000. If the straight- line method of depreciation had been used, depreciation would have been $600,000. The property is sold for $750,000 on January 1 of the current year. The amount and character of the gain is

• A) $150,000 Sec. 1231 gain and $600,000 ordinary income.
• B) $750,000 Sec. 1231 gain.
• C) $750,000 ordinary gain due to Sec. 1250.
• D) $750,000 ordinary gain due to Sec 1245.

---

Definitions:

Operating Characteristics

The specific conditions or parameters within which a device or system is designed to function, such as voltage, speed, and temperature ranges.

Compressors

Mechanical devices that increase the pressure of a gas by reducing its volume, commonly used in air conditioning, refrigeration, and pneumatic applications.

Start Capacitor

A temporary capacitor that increases the starting torque of a motor by introducing a leading current to the auxiliary winding.

Auxiliary Winding

A secondary winding in a motor or transformer used to provide additional electrical pathways or support the main winding.