Jon Owned a Rental Building (But Not the Land)that Was

question 68

Essay

Jon owned a rental building (but not the land)that was destroyed by a hurricane.The building was insured and Jon has a $56,000 gain because his insurance recovery exceeded his adjusted basis for the building.Jon does not intend to replace the building.Jon had taken $45,000 of depreciation on the building,has no § 1231 lookback loss,has no other § 1231 transactions for the year,and has no Schedule D transactions for the year.What is the final nature of Jon's gain for the year and what tax rate(s)apply to the gain?

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Definitions:

Flashing

Flashing is the act of briefly exposing parts of the body that are typically covered, often for shock value, protest, or sexual exhibitionism.

Negotiations

The process by which two or more parties communicate and compromise to reach an agreement.

Sexual Scripts

Sexual behaviors and interactions learned from one’s culture.

Verbal Consent

The explicit and voluntary agreement to engage in a specific sexual activity, communicated through spoken words.