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Aqua Corporation purchases nonresidential real property on May 8, 2016, for $1,000,000. Straight-line cost recovery is taken in the amount of $89,765 before the property is sold on November 27, 2019, for $1,500,000.
Compute the amount of Aqua's recognized gain on the sale of the realty.

Respuesta :

Answer:

$589,765

Explanation:

The computation of the amount of recognized gain on the sale of realty is given below:

= Sale value of the property - remaining amount

where,

Remaining amount equal to

= Purchase value of nonresidential real property - recovery cost

= $1,000,000 - $89.765

= $910,235

So, the recognized gain is

= $1,500,000 -  $910,235

= $589,765

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