Property Flashcards
1
Q
What are ordinary assets?
A
Current assets of a business (A/R and Inventory)
2
Q
What are Section 1231 assets?
A
Non-current business assets (held longer than one year) whose sale or disposal is only incidental. (depreciable and amortizable assets)
3
Q
What are capital assets?
A
All assets that do not qualify as ordinary or 1231 assets. (Investments and personal use individual assets)
4
Q
How are section 1231 assets taxed when sold?
A
Net loss is taxed as ordinary. (Form 4797)
Net gain is taxed as a long term capital gain. (Schedule D)
5
Q
How are Inherited assets classified?
A
Sales are always classified as long term.
