1245 propr/AKA 25% rate gain

Question 1

25% rate gain applies to

Answer 1

when gain on sale isnt totally due to appreciatiom, but some or all is due to depreciation deductions that were quicker than econ depreciation - amount allocated to dep deduction is taxed at ordinary income

Question 2

25% rate gain doesnt apply to or include

Answer 2

bus prop, – any gain attributed to dep ded takes as ordinary nincome

Question 3

policy

Answer 3

Depreciation deduction is used to offset business income, which is ordinary income. So when property is sold at a gain, must recapture previous depreciation deduction which was used to offset ordinary income. So it should be taxed at ordinary income too.

Question 4

tax payer must reduce basis by greater amount of:

Answer 4

1. Allowed deduction
   a. What you actually deduction
2. Allowable deduction
   a. What you were allowed to deduct.
   ii. Even if you don’t take deduction you still have to reduce basis.

Question 5

analysis for when prop is sold at a gain

Answer 5

1. Is it 1245 prop?
   a. dep personal prop
   b. If it is an all gain is treated as OR you are done.
   c. If not.. or not all is 1245
2. Is it a capital asset
   a is the resulting gain capital gain
   b. if not capital asset and not capital gain
3. Is it 1231b prop
   a does sale yeild 1231 gain
   If sold at loss… skip 1245 but do 2-3

Question 6

1245/25% rate gain prop includes

Answer 6

dep personal propert, such as equipment, boats, vehucles

Question 7

1245/25/5 rate gain doesnt include

Answer 7

buildings or land.

Question 8

know diff between

Answer 8

1245, 1231b and capital assrts 1221

Question 9

25% rate gain taxed at

Answer 9

max rate of 25% via 1h()B

Question 10

25% rate gain

Answer 10

has max rate of 25%; LTCG on sale of building attributable to depreciation deduc previously taken

Question 11

most LTCG taxed at 20% exceptions include

Answer 11

collectibles 28% and 25% rate gain