Beige Corporation, a C Corporation, Purchases a Warehouse on August

question 1

Multiple Choice

Beige Corporation, a C corporation, purchases a warehouse on August 1, 2003, for $1 million. Straight-line depreciation is taken in the amount of $411,750 before the property is sold on June 12, 2019, for $1.2 million. What is the amount and character of the gain recognized by Beige on the sale of the realty?

• A) Ordinary income of $0 and § 1231 gain of $611,750.
• B) Ordinary income of $411,750 and § 1231 gain of $200,000.
• C) Ordinary income of $82,350 and § 1231 gain of $529,400.
• D) Ordinary income of $117,650 and § 1231 gain of $494,100.
• E) None of these.

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