With Regard to Noncorporate Taxpayers, All of the Following Statements

question 1232

Multiple Choice

With regard to noncorporate taxpayers, all of the following statements are true regarding Sec. 1250 recapture except

• A) Sec. 1250 affects the character of the gain, not the amount of the gain.
• B) Sec. 1250 ordinary income does not exist if the straight- line method of depreciation is used.
• C) Sec. 1250 ordinary income is never more than the additional depreciation allowed.
• D) Sec. 1250 applies to assets sold or exchanged at either a gain or a loss.

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Definitions:

Expansion Opportunities

Opportunities for a business to grow, either through entering new markets, increasing product lines, or acquiring other businesses.

Sole Proprietor

An individual who owns and operates a business alone, bearing sole responsibility for its operations and liabilities.

Dissolve

To disperse or disappear into a solution, or in a corporate context, to legally terminate a company.

Domestic Corporation

A corporation that is registered and operates within its country of incorporation.