Shanstella bought a 4-unit apartment building in July 2008 for $360,000 and sold it for $480,000 in 2017.There was $96,541 of accumulated straight-line depreciation on the apartment building.Assuming that Shanstella is in the 33% tax bracket,how much of her gain is taxed at 25%?
A)$0.
B)$96,541.
C)$120,000.
D)$216,541.

Question

Quizplus · Accepted Answer

The gain taxed at 25% is the amount of accumulated depreciation, which is $96,541. This is because the IRS requires depreciation recapture on the sale of a depreciable real estate, which is taxed at a maximum rate of 25%.

Shanstella Bought a 4-Unit Apartment Building in July 2008 for $360,000