Mr.and Mrs.Marley operate a small business.This year,the Marleys sold a commercial office building used in their business for $1.1 million.They purchased the building in 2005 for a cost of $900,000 and have deducted $300,000 MACRS depreciation through date of sale.The Marleys should characterize the $500,000 gain recognized on sale as:
A)Capital gain
B)Section 1231 gain
C)$300,000 ordinary gain and $200,000 Section 1231 gain
D)None of the above

Question

Quizplus · Accepted Answer

The gain is Section 1231 gain because the property was used in a trade or business and held for more than one year.

MrAnd MrsMarley Operate a Small Business