A 71% leased 71,000 square foot office building in San Diego was acquired in February 2017 by a California LLC for $39 million. The property’s building/land ratio was determined to be 90/10 at the time of acquisition by the LLC’s accountant. The property was sold in February 2023 for $80 million after leasing the building to 92% occupancy. Tax deductible selling costs included a brokerage fee that was 4% of the sale price plus legal fees and other closing costs of $200,000. What was the total amount of the capital gain plus depreciation recapture upon which tax must be paid on the sale? a. $37,600,000 b. $43,000,000 c.. $41,000,000 d. $46,400,000

A 71% leased 71,000 square foot office building in San Diego was acquired in February 2017 by a California LLC for $39 million. The property’s building/land ratio was determined to be 90/10 at the time of acquisition by the LLC’s accountant. The property was sold in February 2023 for $80 million after leasing the building to 92% occupancy. Tax deductible selling costs included a brokerage fee that was 4% of the sale price plus legal fees and other closing costs of $200,000. What was the total amount of the capital gain plus depreciation recapture upon which tax must be paid on the sale? a. $37,600,000 b. $43,000,000 c.. $41,000,000 d. $46,400,000