How should standard report the gain on year seven tax return

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Problem 1: In year 7, Standard Corp., a C corporation, sold Section 1250 property for $600,000 that had an adjusted basis of $550,000, resulting in a $50,000 gain. The property had cost Standard $720,000 when purchased in year 1, and $170,000 of accelerated depreciation had been taken. Had straight-line depreciation been used, depreciation would have been $100,000. How should Standard report the gain on its year 7 tax return?

A. $20,588 ordinary gain and $29,417 long-term capital gain

B. $28,824 ordinary gain and $41,176 long-term capital gain

C. $70,000 ordinary gain

D. $50,000 ordinary gain

Reference no: EM132824926

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