Ewing Corporation sold an office building that it used in its business for $883,690. Ewing bought the building ten years ago for $764,084 and has claimed $540,145 of depreciation expense. What is the amount of the §1231 capital gain for Ewing Corporation? 108,029 551,722 margin of error +/-2

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.