21. TP sold his hotel in 2020 for $5,000,000. He owned it and operated it individually. Of the total purchase price, $500,000 was allocated to furniture, fixtures and equipment (FF&E). The adjusted basis of the FF&E at the time of sale was $100,000, and accumulated depreciation on the FF&E totaled $200,000. The tax effect of this allocation on the FF&E is the following: a. Capital gain of $400,000 b. Ordinary (recapture) income of $100,000 and $300,000 of capital gain c. Ordinary income of $500,000 d. Ordinary (recapture) income of $200,000, and capital gain of $200,000 None of the above e.

21. TP sold his hotel in 2020 for $5,000,000. He owried it and operated it individually. Of the total purchase price, $500,000 was allocated to furniture, fixtures and equipment (FF\&E). The adjusted basis of the FF\&E at the time of sale was $100,000, and accumulated depreciation on the FF\&E totaled $200,000. The tax effect of this allocation on the FF\&E is the following: a. Capital gain of $400,000 b. Ordinary (recapture) income of $100,000 and $300,000 of capital gain c. Ordinary income of $500,000 d. Ordinary (recapture) income of $200,000, and capital gain of $200,000 e. None of the above