Philip Purchased an Apartment Building in 1987 for $1,000,000

question 116

Multiple Choice

Philip purchased an apartment building in 1987 for $1,000,000.During 2013,the building is sold for $800,000.The accumulated depreciation on the building as of the sale date was $300,000.What is the amount and character of the gain recognized on the sale?

• A)$100,000 Section 1250 ordinary income.
• B)$100,000 Section 1231 long term capital gain.
• C)$100,000 unrecaptured Section 1250 gain.
• D)$100,000 ordinary income.

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Definitions:

Metrics Development

The process of identifying, creating, and implementing measures that accurately assess the performance and efficiency of various business operations.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability that excludes interest and income tax expenses.

Operating Cost

Refers to the ongoing expenses associated with the day-to-day operations of a business, including costs for rent, utilities, payroll, and raw materials.

Revenue-Cost Savings Connection

The relationship between an organization’s efforts to reduce costs and how these efforts impact its revenue, emphasizing efficiency.