Beige Corporation, a C Corporation, Purchases a Warehouse on December

question 55

Multiple Choice

Beige Corporation, a C corporation, purchases a warehouse on December 4, 2002, for $500,000. Straight-line depreciation is taken in the amount of $104,701 before the property is sold on February 8, 2011, for $600,000. What is the amount and character of the gain recognized by Beige on the sale of the realty?

• A) Ordinary income of $0 and § 1231 gain of $204,701.
• B) Ordinary income of $104,701 and § 1231 gain of $100,000.
• C) Ordinary income of $40,940 and § 1231 gain of $163,760.
• D) Ordinary income of $20,940 and § 1231 gain of $183,761.
• E) None of the above.

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Definitions:

Acidosis

A condition in which there is too much acid in the body fluids, lowering the body's pH below the normal range.

Hyponatremia

A condition characterized by low concentrations of sodium in the blood.

Tetany

A condition characterized by severe muscle cramps and spasms caused by an imbalance in calcium levels or other electrolytes in the body.

Endocrine Glands

Glands of the endocrine system that release hormones directly into the bloodstream to regulate bodily functions.