Question - In 2010, Felix sold a piece of equipment from Felix's business for $225,000. The equipment was purchased in 2006 for $135,000. It had a useful life of five years and was depreciated on a straight-line basis. A total of $94,500 depreciation was taken (prior to the sale). What is Felix's recognized gain on the sale?
a. $0
b. $90,000
c. $94,500
d. $184,500
Refer to the facts stated in the prior question. What amount of the gain will be recaptured at ordinary income rates?
a. $0
b. $90,000
c. $94,500
d. $184,500