In 1980, Mr

question 198

Multiple Choice

In 1980, Mr. Lyle purchased a factory building to use in business for $480,000. When Mr. Lyle sells the building for $580,000, he has taken depreciation of $470,000. Straight- line depreciation would have been $400,000. Mr. Lyle must report

• A) $70,000 of ordinary income and $500,000 of Sec. 1231 gain.
• B) $570,000 of ordinary gain.
• C) $470,000 of ordinary gain and $100,000 of Sec. 1231 gain.
• D) $570,000 of Sec. 1231 gain.

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Definitions:

Buyers

Individuals or entities that purchase goods or services for personal use, for use in the production of other goods and services, or for resale.

Market Share

The percentage of an industry or market's total sales that is earned by a particular company over a specified time period.

Cost-effective

Being economical in terms of the results achieved for the amount of money spent.

Segmenting

The method of segmenting a wide market of consumers or businesses into smaller groups based on common traits.