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Flashcards in DEPRECIATION Deck (6):
1

SECTION 1231 PROPERTY IS ____________
SECTION 1245 PROPERTY IS ____________
SECTION 1250 PROPERTY IS ____________

SECTION 1231 DEPRECIABLE TRADE OR BUSINESS PROPERTY
SECTION 1250 DEPRECIABLE REALITY
SECTION 1245 EQUIPMENT

2

1231 - BUSINESS PROPERTY
1245 - BUSINESS PROPERTY MACHINERY AND EQUIPMENT
1250 - REAL ESTATE

1231 Real or bus property held more than 1 year (not inventory); Gain is long term capital but loss is an ordinary loss

1245 Machinery and Equipment;Depreciation recapture is ordinary gain, but remainer is 1231 (see above, LT capital gain) Depreciation Mid-quarter or 1/2 Year

1250 real estate in business; Depreciation in excess of straight line is recaptured. Depreciation 27.5 year residential or 39 year non-residential - mid month convention.

3

WHAT IS THE DEPRECIATION PERIOD FOR RESIDENTIAL REAL ESTATE

27.5

4

COVENANT NOT TO COMPETE IS _______________ INCOME

ORIDINARY

5

SALE OF ACCOUNTS RECEIVABLE RESULTS IN ____________ INCOME

ORDINARY NOT CAPITAL GAIN

6

INTANGIBLES ARE AMORITIZED OVER A __________ YEAR PERIOD

15 YEARS