Gross Income

Question 1

1231 Asset

Answer 1

Depreciable Property used in trade or business and involuntary conversion used more than 1 year

Ex:

Land held for 18 mo
Factory
Building
Parking lot
Equipment

Question 2

Capital Assets

Answer 2

Do NOT produce ordinary income:
Personal use property like: residence, auto
Assets held for investment: stocks, bonds, collectibles, real estate

Question 3

Principal Residence Gain Exclusion

Answer 3

1. $250,000 ($500,000 MFJ)
2. Owned for at least 2 of 5 years
3. Principal residence
4. Not had gain on another residence w/in 2 years of sale date

Question 4

Ordinary Assets (not Capital Assets)

Answer 4

• Accounts Receivable
• Notes Receivable
• Inventory
• Depreciable Property (Trucks/Computers) owned for 1 year or less