Evaluate the gain on the sale

Reference no: EM1376215

Evaluate the gain on the sale but difficulty figuring out the nature of the gain. Can somebody help me out?

In 2012, Paul sells residential rental property for $300,000, which he acquired in 1993 for $150,000. Paul has claimed straight-line depreciation on building of $57,525 (consider that amount is correct). Find the amount and nature of Paul's gain on the sale of the rental property?

A. $207,525 Section 1231 gain

B. $167,400 Section 1231 gain, $57,525 ordinary income.

C. $150,000 Section 1231 gain, $57,525 "unrecaptured depreciation"

D. $190,125 Section 1231 gain, $17,400 "unrecaptured depreciation"

Reference no: EM1376215

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