Multiple Choice
Lopez Corporation sold equipment that it had purchased for $300,000 ($100,000 cash and a note for $200,000) four years ago.As of the date of sale, Lopez had claimed $187,500 in accumulated depreciation on this equipment and had made $50,000 in principal payments on the note.Lopez received $80,000 cash and a note for $100,000 in addition to the purchaser assuming Lopez's $150,000 note on the equipment.What percentage of Lopez Corporation's realized gain on the sale will be taxed as ordinary income due to depreciation recapture?
A) 100%
B) 86.2%
C) 62.5%
D) 0
Correct Answer:
Verified
Correct Answer:
Verified
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