Which of the following creates potential § 1245 depreciation recapture and potential § 1231 gain?
A)Depreciable office furniture held more than one year and sold for more than its original cost.
B)Amortizable goodwill held more than one year and disposed of for less than its adjusted basis.
C)Land held more than one year and sold for more than was paid for it.
D)A note receivable held more than one year and sold for less than was paid for it.
E)None of these.

Question

Quizplus · Accepted Answer

Depreciable equipment (the office furniture)is subject to § 1245 depreciation recapture if it is sold at a gain.However,only the depreciation taken is subject to depreciation recapture and,if the equipment is sold for more than was paid for it,the excess gain is § 1231 gain.

Which of the Following Creates Potential § 1245 Depreciation Recapture