Lopez Corporation sold equipment that it had purchased for $300,000 ($100,000 cash and a note...
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Lopez Corporation sold equipment that it had purchased for $300,000 ($100,000 cash and a note for $200,000) four years ago. As of the date of sale, Lopez had claimed $187,500 in accumulated depreciation on this equipment and had made $50,000 in principal payments on the note. Lopez received $80,000 cash and a note for $100,000 in addition to the purchaser assuming Lopezs $150,000 note on the equipment. What percentage of Lopez Corporation's realized gain on the sale will be taxed as ordinary income due to depreciation recapture? a. 100% b. 86.2% c. 62.5% d. 0
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