LO3 Carl Corporation acquires a business use warehouse for $200,000 on January 2, 2003. From 2003 through 2008, Carl Corporation properly deducts a total of

$30,000 in depreciation. Carl incurs a net operating loss and deducts no depreciation in 2009, even though $12,500 could have been claimed. Kelsa Company has offered to buy the warehouse for $185,000. The sale will be completed on January 1, 2010, if Carl accepts the offer. You are asked to review the proposed sale. Write a memorandum explaining the tax results of the proposed transaction.