Assume That a Building Is Subject to § 1250 Depreciation

question 51

Multiple Choice

Assume that a building is subject to § 1250 depreciation recapture because bonus depreciation [§ 168(k) ] was used. The building is destroyed in a hurricane, which is the taxpayer's only casualty or theft for the year.In which of the following situations could there be a § 1250 depreciation recapture gain?

• A)There is a loss because the insurance recovery is less than the adjusted basis.
• B)There is a gain because the insurance recovery exceeds the adjusted basis.
• C)Because of the length of time the building has been held, there is no remaining additional depreciation.
• D)There is no insurance recovery and the adjusted basis of the building is greater than zero.
• E)None of these.

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