Philip Purchased an Apartment Building in 2001 for $1,000,000

question 8

Multiple Choice

Philip purchased an apartment building in 2001 for $1,000,000.During 2017,the building is sold for $800,000.The accumulated depreciation on the building as of the sale date was $300,000.What is the amount and character of the gain recognized on the sale?

• A)$100,000 Section 1250 ordinary income.
• B)$100,000 Section 1231 long term capital gain.
• C)$100,000 unrecaptured Section 1250 gain.
• D)$100,000 ordinary income.

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Definitions:

Special Order

A one-time customer order often requiring customization or a deviation from standard production practices.

Modifications

Modifications refer to changes or alterations made to a product or system, often to improve functionality, efficiency, or to tailor it to specific needs or preferences.

Mixing Machines

Equipment used in various industries for blending or combining ingredients or materials into a homogeneous or specific mixture.

Demand

The desire of purchasers, consumers, or clients for a particular good or service, coupled with the capacity to purchase it.