Amount and Character of Gains and Losses on Asset Disposition and Netting Process

Free CPA TCP (Tax Compliance & Planning) lesson in Property Transactions. 32 min read, ~4,788 words.

Section 1231 gains net against Section 1231 losses: net gain becomes long-term capital gain, net loss becomes ordinary loss (asymmetric best of both worlds). Recapture applies to each asset individually before Section 1231 netting (recapture first, net second). Section 1245 recaptures ALL depreciation on personal property as ordinary income, capped...

What this lesson covers

• Content
• Example 1
• Example 2
• Example 3
• Example 4
• Example 5
• Example 6
• Example 7
• Example 8
• Example 9
• Example 10
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• IV.B1

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