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

question 73

Multiple Choice

Philip purchased an apartment building in 2001 for $1,000,000.During 2016,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:

Payables

Amounts owed by a company to suppliers or creditors for goods and services received.

Inventory

The raw materials, work-in-progress products, and completely finished goods that are considered to be the portion of a business's assets that is ready or will be ready for sale.

Asynchronization

The lack of synchronization; occurring not simultaneously or at different times or rates.

Financial Planning

Financial planning is the process of creating strategies for managing financial affairs and meeting life goals through the proper management of finances.