Philip purchased an apartment building in 2001 for $1,000,000. During 2018, the building is sold for $800,000. The accumulated depreciation on the building as of the sale date was $300,000. What is the amount and character of the gain recognized on the sale?

A : $100,000 Section 1250 ordinary income.

B : $100,000 Section 1231 long term capital gain.

C : $100,000 unrecaptured Section 1250 gain.

D : $100,000 ordinary income.

Correct Answer : C

Wilshire Corporation purchased a commercial building in 2005 for $975,000. During 2018, the building is sold for $775,000. The actual depreciation on the building as of the sale date was $300,000. What is the amount and character of the gain recognized on the sale?

A : $100,000 Section 1250 ordinary income.

B : $100,000 Section 1231 gain.

C : $100,000 Unrecaptured Section 1250 gain.

D : $100,000 Section 1245 gain.

Correct Answer : B

These are questions from test bank 2019. Please explain why the first one is unrecaptured section 1250 gain, and the second one is section 1231 gain. These two questions make me confused!!! Thank you!