Bateman Corporation sold an office building that it used in its business for $800,800. Bateman bought...
Bateman Corporation sold an office building that it used in its business for $800,800. Bateman bought the building 10 years ago for $599,600 and has claimed $201,200 of depreciation expense. What is the amount and character of Bateman's gain or loss?
Multiple Choice
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$40,240 ordinary and $362,160 §1231 gain.
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$201,200 ordinary and $201,200 §1231 gain.
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$402,400 ordinary gain.
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$402,400 capital gain.
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None of the choices are correct.
Homework Answers
Solution:
Ordinary gain = Amount of depreciation expense claimed = $201,200
Section 1231 gain = Sale value - cost of building = $800,800 - $599,600 = $201,200
Hence 2nd option is correct.
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