A business acquires a rental property several years ago for $562,000, with $112,000 of this amount being the estimated value of the land

Taxation Dec 17, 2020

A business acquires a rental property several years ago for $562,000, with $112,000 of this amount being the estimated value of the land.  At the beginning of the current year the UCC for the property is $374,561.  During the current year, the property is sold for $843,000, with $262,000 of this amount being allocated to the land.  Which of the following statements is correct?

		
The business will have recapture of $75,439 and a capital gain of $281,000.



		
The business will have recapture of $187,439.



		
The business will have recapture of $75,439 and a capital gain of $131,000.


The business will have a taxable capital gain of $281,000

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