Yellow Corporation,
Chapter17: Property Transactions: § 1231 And Recapture Provisions
Section: Chapter Questions
Problem 40P
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Question
Transcribed Image Text:Yellow Corporation, a C corporation, purchases a
building on July 1, 2008, for $1,000,000. Straight-
line depreciation is taken in the amount of $425,000
before the property is sold on May 12, 2023, for
$1,200,000. What is the amount and character of the
gain recognized by Yellow on the sale of the realty?
Ordinary income of $115,000 and § 1231 gain of $510,000.
Ordinary income of $0 and § 1231 gain of $625,000.
Ordinary income of $85,000 and § 1231 gain of $540,000.
Ordinary income of $425,000 and § 1231 gain of $200,000.
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