Harrison Corporation Sells a Building for $330,000 in the Current

question 57

Multiple Choice

Harrison Corporation sells a building for $330,000 in the current year.Harrison purchased the building in 2004 for $250,000 and had taken $20,000 in depreciation on the building up to the date of its sale.How should Harrison report the gain on the sale of the building?

• A)Section 1231 gain of $100,000.
• B)Ordinary income of $100,000.
• C)Section 1231 gain of $80,000 and ordinary income of $20,000.
• D)Section 1231 gain of $96,000 and ordinary income of $4,000.
• E)Ordinary income of $96,000 and Section 1231 gain of $4,000.

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Definitions:

Projection

A defense mechanism where an individual attributes their own unacceptable thoughts or feelings to someone else.

Defense Mechanism

Psychological strategies used unconsciously to protect oneself from anxiety arising from unacceptable thoughts or feelings.

Displacement

A psychological defense mechanism where an individual redirects their emotions or reactions from the original source to another object or person.

Projection

A defense mechanism where an individual attributes their own unacceptable thoughts, feelings, or motives to another person.