§1250 Recaptures the Excess of Accelerated Depreciation Over Straight-Line Depreciation

question 54

True/False

§1250 recaptures the excess of accelerated depreciation over straight-line depreciation on real property placed in service before 1987 as ordinary income.

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Definitions:

Cost-of-Living Adjustment

An increase in income or benefits to match the rise in the cost of living, helping individuals maintain their purchasing power.

Salary

A fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Tax-Deferred Account

A savings account or investment option where taxes on the principal and/or earnings are delayed until the investor withdraws the funds.

Taxable Account

An investment account in which the earnings are subject to income tax.