On January 1, 1986, Joyce Jillian purchased an oﬃce building for $1,200,000. She used the ACRS statutory (accelerated depreciation) and took $1,200,000 depreciation before she sold the building for $1,300,000 on January 1, 2012. Straight-line depreciation would have been $1,200,000.
(a.) How much income does Joyce recognize and how will it be treated?
(b.) What would your answer be to (a) if she had used the optional straight-line method?
(c.) Assume that the building was an apartment building. How much income does Joyce recognize and how will it be treated?
(d.) What would your answer be to (c) if Joyce had used the optional straight-line method?

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The Answer of On January 1, 1986, Joyce Jillian purchased an oﬃce building for $1,200,000. She used the ACRS statutory (accelerated depreciation) and took $1,200,000 depreciation before she sold the building for $1,300,000 on January 1, 2012. Straight-line depreciation would have been $1,200,000.
(a.) How much income does Joyce recognize and how will it be treated?
(b.) What would your answer be to (a) if she had used the optional straight-line method?
(c.) Assume that the building was an apartment building. How much income does Joyce recognize and how will it be treated?
(d.) What would your answer be to (c) if Joyce had used the optional straight-line method?

On January 1, 1986, Joyce Jillian Purchased an Oﬃce Building