Question

Acme, a C corporation, sold a warehouse bought in 1990 for $890,000 during the current year....

  1. Acme, a C corporation, sold a warehouse bought in 1990 for $890,000 during the current year. The building cost $800,000 and the corporation had claimed $320,000 of straight-line depreciation. How much should this C corporation report as section 1231 gain?

    a. $64,000
    b. $320,000
    c. $346,000
    d. $410,000
    e. None of the above.

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Answer #1

Your required answer is option D i.e. $410,000

Explanation:

Since the depreciation is less than it's purchase cost therefore it will be reduced from it's original cost.

I hope this clear your doubt.

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