Question

mr. and mrs. marley operate a small business. this year, the marleys sold a commercial office building used in their business for $1.1 million. they purchased the building in 2007 for a cost of $900,000 and have deducted $300,000 macrs depreciation through date of sale. the marleys should characterize the $500,000 gain recognized on sale as:

Answer 1

The correct option is Both if Firm F is a corporation, it recognizes $55,000 ordinary income and $255,000 Section 1231 gain and if Firm F is a noncorporate taxpayer, it recognizes $310,000 Section 1231 gain are true.

In case a firm is a Corporation 20% of the gain i.e 55000 (275000 * 20%) as ordinary Income and the balance 255000 {[1000000 - ( 965000 - 275000)] - 55000} is recognized 1231 gain is recorded Section 1231

But this rule 20% rule is not applicable to noncorporate taxpayers, it recognizes  310000 {[1000000 - (965000 - 275000)} under Section 1231 gain is true.

Learn more about corporation here

https://brainly.com/question/13551671

#SPJ4