Aqua Corporation purchases nonresidential real property on May 8, 2019, for $2,960,000. Straight-line cost recovery is taken in the amount of $296,000 before the property is sold on November 27, 2022, for $4,440,000.

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a. Compute the amount of Aqua's recognized gain on the sale of the realty. $fill in the blank 5bf49b01905b06f_1

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In general, the recapture rules under 1245 and 1250 are equally applicable to both individual and corporate taxpayers. However, corporations may have more depreciation recapture (ordinary income) on the disposition of 1250 property than individuals. Under 291, a corporation will have additional depreciation recapture over the amount of depreciation recapture computed under 1250 (without regard to 291).

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b. Determine the amount of the recognized gain that is treated as 1231 gain and the amount that is treated as 1250 recapture (ordinary income due to 291). 1231 gain: $fill in the blank 48bb1b039fcdf8f_1 1250 recapture (ordinary income due to 291): $fill in the blank 48bb1b039fcdf8f_2