Joe Jupiter Bought a Store Building for $1,000,000 on January

question 18

Essay

Joe Jupiter bought a store building for $1,000,000 on January 1, 1986. He depreciated the building using ACRS and claimed a total of $1,000,000 depreciation before selling the building on December 31, 2012. Straight-line depreciation would have been $1,000,000, and the selling price was $1,050,000.
(a.) What is the realized gain and how will it be recognized?
(b.) If he had used the optional straight-line method rather than the accelerated method, what would have been Joe's realized gain and how would it have been recognized?

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