In 2014, Tim sells Section 1245 property for $28,000 that he had purchased in 2008. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income? a. $7,000. b. $8,000. c. $13,000. d. $18,000. e. None of the previous choices are correct.
In 2014, Tim sells Section 1245 property for $28,000 that he had purchased in 2008. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income? a. $7,000. b. $8,000. c. $13,000. d. $18,000. e. None of the previous choices are correct.
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 66P
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Transcribed Image Text:In 2014, Tim sells Section 1245 property for $28,000 that he had purchased in 2008. Tim has claimed $7,000 in depreciation on the
property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income?
a. $7,000.
b. $8,000.
c. $13,000.
d. $18,000.
e. None of the previous choices are correct.
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