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S Corporation sold its some assets (land and buildings)

Customer Question

S Corporation sold its some assets (land and buildings) after 10 years' business operation:
Cost:
Land : $1M, Building, $1.5M Depreciation: 500k
Sale price:
Land: $1.1M, Building: $1.6M
Is the gain capital gain or ordinary income to shareholders of the S corp?
Submitted: 8 months ago.
Category: Tax
Expert:  Lane replied 8 months ago.

Hi,

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The land sale is all capital gain.

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The building sale is long-term capital gain, with the exception of depreciation recapture. The 500K is taxed as ordinary income.

...

Let me know if you have questions

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Lane

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I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.