Ch. 12: Business Assets Flashcards
How are Gains and Losses treated for taxation on Section 1231 assets?
For 1231 Assets, gains generally are treated as capital gains and losses are treated as ordinary losses.
What is the lower long term capital gains rate for section 1231 assets?
20%
On 1245 Assets, when the Amount Realized is equal to the Adjusted Basis, what is the tax consequence?
No gain or loss, no depreciation recapture and therefore NO TAX CONSEQUENCE.
On 1245 Assets, when the Amount Realized is less than the Adjusted Basis, what is the tax consequence?
Loss is always treated as an ORDINARY LOSS.
On 1245 Assets, when the Amount Realized is more than the Adjusted Basis AND Gain is less than Depreciation, what is the tax consequence?
Section 1245 treats the gain as Ordinary Gain
On 1245 Assets, when the Amount Realized is more than the Adjusted Basis AND the Gain is more than Depreciation, what is the tax consequence?
Gain up to amount of depreciation taken is treated as ordinary gain under section 1245.
Gain in excess of depreciation taken is treated as capital gain under section 1231.
On section 1250 Assets, what percentage is unrecaptured depreciation taxed at?
25%
