During 2002,Krump Corporation Bought a Factory Building for $500,000

question 1

Multiple Choice

During 2002,Krump Corporation bought a factory building for $500,000.It deducted $180,000 of cost recovery deductions using straight-line depreciation while the building was in service.Krump sells the building in 2017 for $500,000.What are the tax consequences of the sale? (Do not consider Krump's other transactions) .

• A)$180,000 Section 1231 gain.
• B)$180,000 unrecaptured Section 1250 gain.
• C)$180,000 recaptured under Section 1245.
• D)$180,000 Section 1250 gain
• E)$ 90,000 Section 1231 income;and $ 90,000 ordinary income,recaptured under Section 1250.

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