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XYZ partnership owns a building that it maintains and rents to business tenants . XYZ’s adjusted...

XYZ partnership owns a building that it maintains and rents to business tenants . XYZ’s adjusted basis is $250,000. The building is condemned to make way for a major airport expansion and XYZ gets a condemnation award of $500,000 . Because of the date the building was placed in service and the fact that XYZ always took straight-line depreciation, there is no depreciation recapture on the transaction . XYZ has no other section 1231 transactions for the year. Which is true?

a.). XYZ has a $250,000 long-term capital gain

b.). XYZ Has a  $250,000 ordinary gain

c.). XYZ has a $500,000 Long-term capital gain

d.). XYZ must reinvest the amount received in Like kind property in order to receive capital gains treatment

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Answer is highlighted in yellow: Solution: a.). XYZ has a $250,000 long-term capital gain Answer: Explanation: Condemnation a

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