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

question 816

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

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Definitions:

Psychotherapy

The treatment of mental disorder by psychological rather than medical means.

Neuroticism

A personality trait marked by emotional instability, anxiety, moodiness, worry, and fear.

Personality Trait

Enduring characteristics or qualities that describe an individual's consistent manner of behavior, feeling, and thought.

Predisposition

An inclination or tendency to behave in a particular way or to be affected by a particular condition.