If an individual sells depreciable real estate at a gain
I.the entire gain is taxed at a maximum rate of 15%.
II.the gain due to depreciation is taxed as a long-term capital gain.

Question

If an individual sells depreciable real estate at a gain
I.the entire gain is taxed at a maximum rate of 15%.
II.the gain due to depreciation is taxed as a long-term capital gain.
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Quizplus · Accepted Answer

Both statements are incorrect. The gain on the sale of depreciable real estate is taxed as a long-term capital gain, but the tax rate varies depending on the individual's tax bracket. The gain due to depreciation is taxed as ordinary income, not as a long-term capital gain.

If an Individual Sells Depreciable Real Estate at a Gain