Kari owns depreciable residential rental real estate which has accumulated depreciation (all from straight-line)of $45,000.If Kari sold the property,she would have a $33,000 gain.The initial characterization of the gain would be:

Question

Quizplus · Accepted Answer

The initial characterization of the gain would be Section 1231 gain because the property is depreciable rental real estate which is a Section 1250 asset. Since the accumulated depreciation is less than the gain, the gain will be treated as a long-term capital gain under Section 1231.

Kari Owns Depreciable Residential Rental Real Estate Which Has Accumulated