Mitch, an NRA, Sells a Building in Omaha for $1

question 126

Multiple Choice

Mitch, an NRA, sells a building in Omaha for $1 million. His basis in the building is zero for both regular tax and AMT purposes. Mitch has no other contact with the U.S. other than the ownership of the building. How much Federal income tax is due from Mitch on the sale?

• A) $0, as Mitch is an NRA.
• B) The amount realized times the top individual tax rate.
• C) The net gain times the top capital gains tax rate.
• D) The net gain taxed at the lesser of the applicable regular or AMT rates.

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Definitions:

Anesthetic

Substances that cause loss of sensation or consciousness, used medically during surgeries.

Coelom

A fluid-filled body cavity found in most multicellular organisms, entirely surrounded by mesoderm tissue, providing space for the development and suspension of organs and systems.

Intestines

Tubular digestive system organs responsible for nutrient absorption and waste elimination.

Reproductive Organs

Organs involved in the production of gametes (sperm and eggs) and in supporting the processes of fertilization, pregnancy, and childbirth.