R3 - Gains & Losses Flashcards
1
Q
Section 1231
A
- Depreciable personal property used in business (i.e car, boat)
- PPE used in business
- Held for over 12 months
- Gains are treated as LTCG
- Losses are treated as ordinary losses.
2
Q
Section 1245 (Machinery and Equip) >12 months
A
- Depreciable property used in business for over 12 mo
- Subj to depreciation recapture
3
Q
Sec 1245 - Depreciation Recapture: Treated as ordinary gain
A
Lesser of:
- Gain Recognized
- Accum Depreciation
- Remaining gain is a Section 1231 gain
4
Q
Section 1250
A
- Real Property used in business for over 12 mo
5
Q
Sec 1250 - Depreciation Recapture: Taxed at 25%
A
- If Sec 1250, applied to Lesser of:
- Gain Recognized
- Accum Depreciation at SL
- Remaining gain is a Section 1231 gain
6
Q
What is the tax rate for Unrecaptured Section 1250 Gain?
A
25% from depreciation of RE not treated as ord income
7
Q
What is the tax rate for Collectibles and QSBS?
A
28%
8
Q
Personal Bad Debt
A
Short-term when worthless
9
Q
Worthless stock and securities
A
When totally worthless
10
Q
Holding period of Short Sales
A
Starts when short sale is executed
11
Q
Netting Process for individuals
ST
A
- ST
- 28%
- 25%
- LT
12
Q
Netting Process for individuals
LT
A
- LT
- 28%
- 25%
- ST
13
Q
Netting Process for individuals
28%
A
- 28%
- 25%
- LT
- ST
14
Q
Netting Process for individuals
25%
A
No losses.
15
Q
Capital Losses: C-Corp
A
- Can’t offset ordinary income.
- Flat rate applies.
- CB 3 - CF 5.
