Wilshire Corporation purchased a commercial building in 2001 for $975,000.During 2017,the building is sold for $775,000.The actual depreciation on the building as of the sale date was $300,000.What is the amount and character of the gain recognized on the sale?

Question

Quizplus · Accepted Answer

The gain is calculated as the selling price ($775,000) minus the adjusted basis (original cost $975,000 minus depreciation $300,000), resulting in a $100,000 gain. Since it's real property, it is a Section 1231 gain.

Wilshire Corporation Purchased a Commercial Building in 2001 for $975,000