Ross Purchased a Building in 1985,which He Uses in His

question 25

Multiple Choice

Ross purchased a building in 1985,which he uses in his manufacturing business.Ross uses the ACRS statutory rates to determine the cost-recovery deduction for the building.Ross's original cost for the building is $500,000 and cost-recovery deductions allowed are $500,000.If the building is sold for $340,000,the tax results to Ross are

• A)$340,000 LTCG.
• B)$340,000 Sec.1231 gain.
• C)$340,000 Sec.1245 ordinary income.
• D)$340,000 Sec.1250 ordinary income.

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Definitions:

Wages

Payments made to employees based on the hours worked or tasks performed, typically on a regular basis.

Direct Labor

The wages and benefits paid to workers who are directly involved in the production of goods or services.

Office Equipment

Assets like computers, printers, and furniture used in an office to facilitate work.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.