- $90,000?
Avalon realizes a $34,000 gain on the sale. The entire gain is recaptured as ordinary income:
Amount realized $ 90,000
Adjusted basis ($150,000 – $94,000) (56,000)
Gain on sale $ 34,000
Section 1245 – Ordinary income 34,000
Section 1231 gain $ -0-
- $155,000?
Avalon realizes a $99,000 gain on the sale. The $94,000 of depreciation is recaptured as ordinary income, leaving a $5,000 Section 1231 gain:
Amount realized $155,000
Adjusted basis ($150,000 – $94,000) (56,000)
Gain on sale $ 99,000
Section 1245 – Ordinary income 94,000
Section 1231 gain $ 5,000
- $40,000?
Avalon realizes a $16,000 loss on the sale. The $16,000 loss is a Section 1231 loss — depreciation recapture applies only to gains:
Amount realized $ 40,000
Adjusted basis ($150,000 – $94,000) (56,000)
Loss on sale $ (16,000)
