Residential Real Estate Was Purchased in 2013 for $345,000,held as Rental

question 39

Essay

Residential real estate was purchased in 2013 for $345,000,held as rental property,and depreciated straight-line.Assume the land cost was $45,000 and the building cost was $300,000.Depreciation totaled $34,089.The building and land were sold on June 10,2016,for $683,000 total.What is the tax status of the property,the nature of the gain from the disposition,and is any of it § 1250 depreciation recapture gain or unrecaptured § 1250 gain?

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Definitions:

Financial Reporting

The process of disclosing financial information and statements to management, investors, and regulators to reflect a company's financial performance and position.

Units Sold

The total number of product units that have been sold during a specific time period.

Cost Formula

A method or equation used to calculate the total cost of production, including fixed and variable expenses.

Activity Level

Refers to the volume of production or the rate of operations within a specific period.