Question

Moran owns a building he bought during year 0 for $179,000. He sold the building in year 6. During the time he held the building he depreciated it by $47,000. What is the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? (Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable.)

a. Moran received $161,000.

Description	Amount
Total Gain/(Loss) Recognized	$
	$
Remaining §1231 gain (loss)	$

Answer 1

Total Gain/ (Loss) Recognized = $29,000 Remaining  §1231 Gain = $29,000

Explanation;  

1	Amount Realized	$161,000
2	Original Basis	$179,000
3	Accumulated Depreciation	$47,000
4	Adjusted Basis (2) -(3)	$132,000
5	Gain/(Loss) Recognized (1) -(4)	$29,000
6	Unrecaptured  §1250 gain (and  §1231 gain )[ (Lessor of (5) or (3)]	$29,000
7	Remaining  §1231 gain [(5) - (6)]	0
	Total § 1231 Gain [(6) + (7)]	$29,000