Federal Taxation 1

Bateman Corporation sold an office building that it used in its business for $801,000. Bateman bought the building 10 years ago for $599,500 and has claimed $201,500 of depreciation expense. What is the amount and character of Bateman's gain or loss?

Multiple Choice

• $40,300 ordinary and $362,700 1231 gain.

• $403,000 ordinary gain.

• $201,500 ordinary and $201,500 1231 gain.

• None of the choices are correct.

• $403,000 capital gain.