Question

Emily, whose tax rate is 32%, owns an office building which she purchased for $900,000 on March 18 of last year. The building is sold for $950,000 on February 20 of this year when the adjusted basis of the building was $876,000. The tax results to Emily are

A) $74,000 1231 gain taxed at 15%.

B) $74,000 ordinary income taxed at 32%.

C) $24,000 1250 unrecaptured gain taxed at 25% and $50,000 1231 gain taxed at 15%.

D) $24,000 1231 gain taxed at 15% and $50,000 ordinary income taxed at 32%.

Answer 1