Beige Corporation, a C Corporation, Purchases a Warehouse on December

Multiple Choice

Beige Corporation, a C corporation, purchases a warehouse on December 4, 2002, for $500,000. Straight-line depreciation is taken in the amount of $104,701 before the property is sold on February 8, 2011, for $600,000. What is the amount and character of the gain recognized by Beige on the sale of the realty?

A) Ordinary income of $0 and § 1231 gain of $204,701.
B) Ordinary income of $104,701 and § 1231 gain of $100,000.
C) Ordinary income of $40,940 and § 1231 gain of $163,760.
D) Ordinary income of $20,940 and § 1231 gain of $183,761.
E) None of the above.