TAX CONSEQUENCES SECTION 1250: EXAMPLE
01.Core Concepts
Lucas purchased an office building for $1,000,000. He has taken depreciation deductions of $300,000 (straight-line depreciation would have been $200,000) at the time that he sold the building for $1,500,000. Amount Realized $1,500,000 Adjusted Basis ($700,000) Total Gain $800,000 Gain Taxation Ordinary Income $100,000 25% Tax Rate $200,000 Capital Gain $500,000 $800,000