Which of the following gains does not result solely in an ordinary gain or loss?
A)Sale of equipment held for less than a year.
B)Sale of inventory.
C)Sale of equipment where the gain realized exceeds the accumulated depreciation.
D)Sale of equipment where the accumulated depreciation exceeds the gain realized.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The sale of equipment where the gain realized exceeds the accumulated depreciation does not result solely in an ordinary gain or loss because the portion of the gain exceeding the accumulated depreciation is treated as a Section 1231 gain, which can be taxed as a long-term capital gain if certain conditions are met.

Which of the Following Gains Does Not Result Solely in an Ordinary