Joe has recognized gain of $ 1,050,000 , of which $ 1,000,000 is recaptured as ordinary income and the remaining $ 50,000 is taxed at a maximum rate...
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Correct Answer: (a.) Joe has recognized gain of $1,050,000, of which $1,000,000 is recaptured as ordinary income and the remaining $50,000 is taxed at a

maximum rate of 15 percent. This is ACRS nonresidential real property depreciated under the statutory accelerated method. Therefore, the lesser of the total depreciation or the realized gain is recaptured as ordinary income. (b.) Had straight-line depreciation been taken, Joe would have recognized gain of $1,050,000 of which $1,000,000 is taxed at a maximum rate of 25 percent and the remaining $50,000 is taxed at a maximum rate of 15 percent.
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Uploaded by: Kid_Tank_Grouse

Subject: Accounting, Business

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