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The following properties have been owned by a business for more than one year.  Which of them would not qualify for Section 1231 treatment on its disposal?a.  Property held for rental  incomeb.  Depreciable assets used in the businessc.  Stock held in Inventoryd.  Leasehold improvements

Question

The following properties have been owned by a business for more than one year.  Which of them would not qualify for Section 1231 treatment on its disposal?

  • a.  Property held for rental  income
  • b.  Depreciable assets used in the business
  • c.  Stock held in Inventory
  • d.  Leasehold improvements
check_circleAnswer
Step 1
  • 1231 property includes:
  • Livestock held for draft, breeding, dairy, or sporting purposes
  • Depreciable or real property used in business 
  • Property held for production of income if it has been involuntarily converted
  • Unharvest crops on land used in businesses
  • Timber, coal, or domestic iron ore
  • certain purchased intangible assets (patents and goodwill) that are eligible for amortization
Step 2
  • 1231 property excludes:
  • Inventory and property held primarily for sale
  • Accounts receivable and notes receivable rising in the normal course of the business
  • Property not held for more than a year
  • Business-use property, where casualty losses exceed casualty gains for the taxable year
  • Copy rights
Step 3

Stock held in inventory would not qualify for section...

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