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On January 4, 1986, Rita Racksaw purchased a warehouse for $150,000. In 2020, she sold the warehouse for $107,000. She took $150,000 depreciation under ACRS and straight-line depreciation would have been $150,000. How much and what type of income or gain would Rita have on the sale? $43,000 Section 1231 loss $107,000 Section 1231 gain $107,000 long-term capital gain $107,000 ordinary income

On January 4, 1986, Rita Racksaw purchased a warehouse for $150,000. In 2020, she sold the warehouse for $107,000. She took $150,000 depreciation under ACRS and straight-line depreciation would have been $150,000. How much and what type of income or gain would Rita have on the sale? $43,000 Section 1231 loss $107,000 Section 1231 gain $107,000 long-term capital gain $107,000 ordinary income

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 4, 1986, Rita Racksaw purchased a warehouse for $150,000. In 2020, she sold the warehouse for $107,000. She took $150,000 depreciation under ACRS and straight-line depreciation would have been $150,000. How much and what type of income or gain would Rita have on the sale?

  1. $43,000 Section 1231 loss
  2. $107,000 Section 1231 gain
  3. $107,000 long-term capital gain
  4. $107,000 ordinary income
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