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Section 1245
A provision in the U.S. tax code that treats the gain from the sale of certain types of property (primarily depreciable personal property) as ordinary income rather than capital gain.
Ordinary Income
Income earned through wages, salaries, commissions, and interest, subject to standard tax rates.
Preferential Treatment
Practices or policies that give favorable tax treatment to certain transactions, investments, or income, often to encourage specific economic activities.
Holding Period
The duration of time an investment is owned or held by an investor, which can affect the tax implications of the investment's gains or losses.
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