Alejandro Purchased a Building in 1985, Which He Uses in His

Multiple Choice

Alejandro purchased a building in 1985, which he uses in his manufacturing business. Alejandro used the ACRS statutory rates to determine the cost- recovery deduction for the building. Alejandro's original cost for the building is $500,000 and cost- recovery deductions allowed are $500,000. If the building is sold for $800,000, the tax results to Alejandro are

A) $800,000 Sec. 1245 ordinary income.
B) $500,000 Sec. 1245 ordinary income and $300,000 Sec. 1231 gain.
C) $500,000 Sec. 1245 ordinary income and $300,000 Sec. 1250 income.
D) $800,000 Sec. 1231 gain.