Octet Corporation placed a small storage building in service in 1993.Octet's original cost for the building is $800,000 and the cost recovery deductions are $300,000.This year the building is sold for $1,100,000.The amount and character of the gain are

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The ordinary gain is the recapture of depreciation, which is $300,000. The remaining gain is the difference between the adjusted basis ($500,000) and the sale price ($1,100,000), resulting in a Sec. 1231 gain of $540,000.

Octet Corporation Placed a Small Storage Building in Service in 1993.Octet's