Which of the Following Statements About Section 1250 Recapture Rule

question 109

Multiple Choice

Which of the following statements about Section 1250 recapture rule is false?

• A) The rule applies to sales of depreciable realty by noncorporate taxpayers but not to sales by corporate taxpayers.
• B) The rule applies only to sales of depreciable realty placed in service before 1987.
• C) The rule applies only to sales of depreciable realty for which an accelerated tax depreciation method was used.
• D) The rule has no effect on the characterization of gain recognized on sale of any realty with a zero tax basis.

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Definitions:

Company Truck

A vehicle owned by a business, used for the company's operations or logistical needs.

Company Car

A vehicle provided by a company for the business and sometimes personal use of its employees.

Units-of-Activity Method

A depreciation method that calculates an asset's expense based on its usage, activities, or units of production, rather than the passage of time.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.