The Purpose of Sec

question 77

True/False

The purpose of Sec.1245 is to eliminate the advantage taxpayers would have if they were able to reduce ordinary income by depreciation deductions and also receive favorable Sec.1231 treatment when the asset was sold.

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Definitions:

Restructuring Gain

Income or positive financial impact resulting from alterations made to a company’s operations, structure, or strategy aimed at improving efficiency or reducing costs.

Receivable

Money owed to a company by its customers or clients for goods or services provided on credit.

State Bank

A financial institution that is chartered by a state government, as opposed to a national or federal charter.

Securitization

The process of pooling various types of contractual debt such as mortgages or loans and selling them as consolidated financial instruments to investors.