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The Angel Corporation purchased an office building for $600,000 12 years ago. The corporation claimed $80,000...

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Accounting

The Angel Corporation purchased an office building for $600,00012 years ago. The corporation claimed $80,000 of cost recoverydeductions before it sold the building for $700,000.

  1. Determine the amount and type of gain or loss that AngelCorporation recognizes on the sale of the building
  2. Would your answer change if Angel was a soleproprietorship?
  3. Would your answer change if Angel Corporation incurred $43,000of Section 1231 losses in the prior year?

Answer & Explanation Solved by verified expert
4.5 Ratings (744 Votes)
A 700000 600000 80000 180000 total gain Only 80000 of this gain is subject to Section 291 recapture however as that is the limit of Section 1245 recapture if that provision applied Thus the Section 291 recapture    See Answer
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