Leonard London Sold a Building Used in His Business to Michelle

question 37

Multiple Choice

Leonard London sold a building used in his business to Michelle Martinson. He had purchased the property several years previously for $340,000, $300,000 of which was the mortgage. Major improvements in the amount of $240,000 had been made. At the time of the sale, Leonard had taken $220,000 in straight-line depreciation. Leonard paid $104,000 in selling expenses. Michelle gave Leonard $400,000 in cash and unlike property with a fair market value of $240,000, assumed a delinquent real estate bill of $105,000 and assumed Leonard's mortgage on the property in the amount of $234,000. What is Leonard's gain on the sale?

• A) $191,000
• B) $385,000
• C) $410,000
• D) $503,000
• E) $515,000

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Definitions:

Transition State

A high-energy, temporary state in a chemical reaction where reactants are converted into products.

Hydrogen Abstraction

A chemical reaction where a hydrogen atom is removed from a molecule by another atom or molecule.

Termination Step

The final step in a chemical reaction sequence that produces stable products from reactive intermediates, thus concluding the reaction.

Free Radical Chlorination

A chemical reaction in which chlorine atoms are added to a molecule via free radical mechanisms, often used for the halogenation of alkanes.