Purchased an apartment building for total purchase

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Reference no: EM131464218

In 1992 Duncan Corporation purchased an apartment building for a total purchase of $4,500,000. The property was placed in service on July 1, 1992. Duncan depreciated the building under the MACRS rules and depreciation of $3,500,000 was taken. Parker sold the building on December 31, 2016 for $5,000,000. Gain on the sale will be reported as a

A. Section 1250 gain of $700,000 and Section 1231 gain of $3,300,000

B. Section 1250 gain of $3,500,000 taxed at 25% and Section 1231 gain of $500,000

C. Section 1231 gain of $4,000,000.

D. An ordinary income 1250 gain of $3,500,000 and Section 1231 gain of $500,000.

E. None of the above

Reference no: EM131464218

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