Otis Bought a 2-Unit Apartment Building in July 2008 for $330,000

question 8

Multiple Choice

Otis bought a 2-unit apartment building in July 2008 for $330,000 and sold it for $400,000 on December 20, 2015. At the time of sale there was $83,493 of accumulated straight-line depreciation on the apartment building. Assuming Otis is in the 33% tax bracket, how much of the gain will be taxed at 25%?

• A) $0.
• B) $70,000.
• C) $83,493.
• D)$153,493.

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Definitions:

Needle-In-A-Haystack Problem

A metaphorical expression referring to the difficulty of finding a specific item or solution in a vast space or among many possibilities.

Knowledge Transfer

The process of sharing knowledge, skills, and expertise among individuals or organizations.

Subsidiaries

Companies that are owned or controlled by another company, known as the parent company or holding company.

Divisional Structure

An organizational structure where operations are segmented based on projects, products, or geographic locations.