On June 1, 2019, Skylark Enterprises, a calendar year LLC reporting as a sole proprietorship, acquired a retail store building for $500,000 (with $100,000 being allocated to the land). The store building was 39 -year real property, and the straight-line cost recovery method was used. The property was sold on June 21,2023 , for $385,000. Click here to access EXHIBIT 8.8 MACRS Straight-Line Depreciation for Real Property. Carry all cost recovery rates out to five decimal places. Round the total cost recovery deduction to the nearest dollar. a. Compute the cost recovery and adjusted basis for the building. Total cost recovery is $ X, and the adjusted basis for the building is $ X. Feedback Check My Work Generally, 1250 property is depreciable real property (principally buildings and their structural components) that is not subject to 1245. Intangible real property, such as leaseholds of 1250 property, is also included. The Code contains two major recapture provisions, 1245 ar 1250. These provisions cause gain to be treated initially as ordinary gain. b. What are the amount and nature of Skylark's gain or loss from disposition of the property? What amount, if any, of the gain is unrecaptured 1250 gain? There is q X of recognized on the sale of the property, of which is/are subject to 1250 recapture