Beige Corporation,a C Corporation,purchases a Warehouse on December 4,2001,for $500,000

question 26

Multiple Choice

Beige Corporation,a C corporation,purchases a warehouse on December 4,2001,for $500,000.Straight-line depreciation is taken in the amount of $104,701 before the property is sold on February 8,2010,for $600,000.What is the amount and character of the gain recognized by Beige on the sale of the realty?

• A)Ordinary income of $0 and § 1231 gain of $204,701.
• B)Ordinary income of $20,940 and § 1231 gain of $183,761.
• C)Ordinary income of $40,940 and § 1231 gain of $163,760.
• D)Ordinary income of $104,701 and § 1231 gain of $100,000.
• E)None of the above.

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