Eric Purchased a Building in 2006 That He Uses in His

question 47

Multiple Choice

Eric purchased a building in 2006 that he uses in his business.Eric uses the straight-line method for the building.Eric's original cost for the building is $420,000 and cost-recovery deductions are $120,000.Eric is in the top tax bracket and has never sold any other business assets.If the building is sold for $560,000,the tax results are

• A)$260,000 Sec.1231 gain,all taxable at 20%.
• B)$260,000 unrecaptured Sec.1250 gain,all taxable at 25%.
• C)$260,000 Sec.1231 gain,of which $120,000 is unrecaptured Sec.1250 gain taxable at 25% and the $140,000 balance is taxable at 20%.
• D)$120,000 Sec.1245 ordinary income,$140,000 Sec.1231 gain taxable at 20%.

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Definitions:

Biological Psychology

A branch of psychology that explores the connections between biological processes and psychological states.

Neurotransmitter Deficiencies

A condition marked by lower-than-normal levels of neurotransmitters in the brain, potentially resulting in various neurological or psychological disorders.

Tomography

A imaging technique that creates detailed cross-sectional images of the body or other structures by scanning them from different angles.

Biopsychosocial Systems

An approach in psychology that examines psychological disorders and treatments based on the complex interplay between biological, psychological, and social factors.