A Retail Building Used in the Business of a Sole

question 93

Multiple Choice

A retail building used in the business of a sole proprietor is sold on March 10,2011,for $322,000.The building was acquired in 2001 for $400,000 and straight-line depreciation of $104,000 had been taken on the building.What is the maximum unrecaptured § 1250 gain from the disposition of this building?

• A) $400,000.
• B) $322,000.
• C) $104,000.
• D) $26,000.
• E) None of the above.

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Definitions:

Stock Warrants

A form of derivative that gives the holder the right, but not the obligation, to buy a company's stock at a specific price before the warrant expires.

Intrinsic Value Method

A method of valuing a company or its stock by determining the present value of its expected future earnings or cash flows, disregarding current market conditions.

Stock Appreciation Rights

A type of employee compensation linked to the increase in the price of the company's stock over a set period.

Performance-based

An approach or system where rewards, compensation, or progression are tied to the achievement of specific goals, outcomes, or the quality of work performed.