A retail building used in the business of a sole proprietor is sold on March 10, 2021, for $342,000. The building was acquired in 2011 for $400,000 and straight-line depreciation of $104,000 had been taken on it. What is the maximum unrecaptured § 1250 gain from the disposition of this building? a.$400,000 b.$322,000 c.$104,000 d.$26,000
A retail building used in the business of a sole proprietor is sold on March 10, 2021, for $342,000. The building was acquired in 2011 for $400,000 and straight-line depreciation of $104,000 had been taken on it. What is the maximum unrecaptured § 1250 gain from the disposition of this building? a.$400,000 b.$322,000 c.$104,000 d.$26,000
Chapter17: Property Transactions: §1231 And Recapture Provisions
Section: Chapter Questions
Problem 2CPA
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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A retail building used in the business of a sole proprietor is sold on March 10, 2021, for $342,000. The building was acquired in 2011 for $400,000 and straight-line
depreciation of $104,000 had been taken on it. What is the maximum unrecaptured § 1250 gain from the disposition of this building?a.$400,000b.$322,000c.$104,000d.$26,000
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