A Taxpayer Purchased a Factory Building in 1985 for $800,000

question 46

Multiple Choice

A taxpayer purchased a factory building in 1985 for $800,000.After claiming ACRS-accelerated depreciation of $800,000,she sells the asset for $1,000,000 during the current year.No payment is received during the current year,and the $1,000,000 balance to be paid with interest at the interest rate in four annual payments beginning one year from date of sale.The installment sales method is adopted.How much ordinary income is recognized in the current year?

• A)$0
• B)$200,000
• C)$800,000
• D)$1,000,000

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Definitions:

Synergy Value

The additional value created by combining two companies, expected to result from efficiencies, shared technologies, or market capabilities.

Stock-Financed Deal

A transaction, often in mergers and acquisitions, where payment is made in the form of the acquiring company's stock.

Incremental Value

The additional or excess value that an activity, project, or entity generates compared to a baseline scenario.

Shares Outstanding

The total number of shares of a company that are currently owned by investors, including restricted shares.