Which of the following transactions results solely in §1245 gain?
A)Sale of machinery held for less than one year.
B)Sale of machinery held for more than one year, where the gain realized exceeds the accumulated depreciation.
C)Sale of machinery held for more than one year, where the accumulated depreciation exceeds the gain realized.
D)Sale of land held for more than one year, where the amount realized exceeds the adjusted basis.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

§1245 gain is recaptured depreciation on personal property such as machinery. When the accumulated depreciation exceeds the gain realized, all of the gain is considered to be §1245 gain. Therefore, the sale of machinery held for more than one year with accumulated depreciation exceeding the gain realized would result solely in §1245 gain.

Which of the Following Transactions Results Solely in §1245 Gain