Six Years Ago,Alejo Company Purchased Real Property by Paying $250,000

Multiple Choice

Six years ago,Alejo Company purchased real property by paying $250,000 cash and giving the seller its $1 million note for the balance of the purchase price.This year,Alejo deducted $30,800 depreciation on the property and made a $125,000 principal payment on the note.Which of the following statements is false?

A) The depreciation deduction reduced Alejo's adjusted tax basis in the real property.
B) The principal payment increased Alejo's equity in the real property.
C) The principal payment reduced Alejo's tax basis in the real property and the balance due on the note.
D) None of the above statements is false.