Douglas bought office furniture two years and four months ago for $25,000 to use in his business and elected to expense all of it under Sec. 179. Depreciation of $3,500 would have been taken under the MACRS rules. If Douglas converts the furniture to nonbusiness use today, Douglas must

A) amend the prior two years tax returns.
B) include $3,500 in gross income in year of conversion.
C) include $21,500 in gross income in year of conversion.
D) include $25,000 in gross income in year of conversion.


C) include $21,500 in gross income in year of conversion.

$25,000 depreciation taken - $3,500 depreciation that would have been taken = $21,500 must be recaptured.

Business

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