Joycelyn purchased a house and property two years ago for $380,000, an appraiser determined that the house was worth $285,000 and the land was worth $95,000. The property was purchased as a rental. Joycelyn’s depreciation is $20,000 and the end of the fifth year, the year that she decides to sell the house. The house sold for $450,000. Joycelyn’s marginal rate is 35%.

a. Joycelyn claims depreciation of $20,000 and sells the property five years later for $450,000 what is the realized gain on the building and the land as well?

b. What is character of the gain or loss for the land and building?

c. What is the tax due on the house and land?