Lynne Owns Depreciable Residential Rental Real Estate Which Has Accumulated

question 55

Multiple Choice

Lynne owns depreciable residential rental real estate which has accumulated depreciation (all from straight-line) of $65,000. If Lynne sold the property, she would have a $53,000 gain. The initial characterization of the gain would be:

• A) Section 1245 gain.
• B) Section 1231 gain.
• C) Section 1250 gain.
• D) Section 1239 gain.
• E) None of the above.

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Definitions:

Nominal Interest Rates

The rate of interest before adjustments for inflation, reflecting the price of borrowing money.

Price Level

A metric that calculates the mean of present prices for all goods and services produced within the economy, relative to a reference year.

Consumer Price Index

An index that measures the average change in prices paid by consumers for a basket of goods and services over time, often used as an indicator of inflation.

Bureau of Labor Statistics

A U.S. government agency responsible for collecting and analyzing economic data related to labor market activity, working conditions, and price changes in the economy.