Reference no: EM131746206

Dan sells his manufacturing plant and land originally purchased in 1980. Accelerated depreciation had been taken on the building, but the building is now fully depreciated. Dan is in the 39.6 percent marginal tax bracket this year in 2016. Other information is as follows:

Property Original Cost Total Depreciation Adjusted Basis Selling Price

Plant Builting $2,800,000 $2,800,000 0 $3,200,000

Land $500,000 N/A $500,000 $800,000

Dan has not sold any other assets in 2016. A review of Dan's files shows that the only other disposition of business assets in the past five years was a truck sold for a $12,000 loss last year. Give the amounts and character of Dan's gains on the sale and the applicable tax rates at which those gains will be taxed in 2016.