BUSINESS - SECTIONS

Question 1

Section 1250 Property

Answer 1

Any real property (other than section 1245 property) which is or has been property of a character subject to the allowance for depreciation.

(ie. office buildings)

1250 is specific to REAL PROPERTY including land and the buildings/ structures on it.

Question 2

Section 1245 Property

Answer 2

Section 1245 property includes any property that is or has been subject to depreciation or amortization and is:

1. Personal property,
2. Other tangible property (other than a building or its structural components) that is:
   a. Used in manufacturing, production, extraction or furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services,
   b. A research facility used for the activities in (a), or
   c. A facility used in any of the activities in (a) for the bulk storage of fungible commodities,
3. Real property (other than property described in (2) with an adjusted basis that was reduced by certain amortization recapture deductions listed in section 1245(a)(3)(C) of the Internal Revenue Code,
4. A single purpose agricultural or horticultural structure, or
5. A storage facility (other than a building or its structural components) used for the distribution of petroleum.

NOTE: Can be INTANGIBLE property.

Question 3

Non-Recaptured Section 1231 Losses are net Section 1231 losses for the previous ________ years?

Answer 3

5 years.

This is for losses that have NOT been applied against a net section 1231 gain!

The recapture period is 5 yrs beginning with the earliest loss in the 5 year period.