During the year, RD Corporation sells a building and receives $800,000. The building was originally purchased for $500,000. RD properly took $300,000 of MACRS (straight-line) depreciation.

RD has Sec.1250 depreciation recapture of $300,000. RD has a realized gain of $300,000 RD recognizes a Sec. 1231 gain of $600,000. RD recognizes ordinary income of $60,000 and a Sec. 1231 gain of $540,000 None of the above.