Which of the Following Creates Potential § 1245 Depreciation Recapture

question 23

Multiple Choice

Which of the following creates potential § 1245 depreciation recapture and potential § 1231 gain?

• A)Depreciable equipment held more than one year and sold for more than its original cost.
• B)Amortizable goodwill held more than one year and disposed of for less than its adjusted basis.
• C)Land held more than one year and sold for more than was paid for it.
• D)Inventory held more than one year and sold for more than was paid for it.
• E)None of the above.

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Definitions:

Define The Problem

The initial step in the problem-solving process, involving the identification and clear articulation of an issue or obstacle that needs to be addressed.

Five-step Model

Often refers to processes or methodologies broken down into five distinct stages; specific application varies across disciplines, including problem-solving and decision-making frameworks.

Representativeness

The cognitive bias in decision-making where the likelihood of an event is evaluated based on how much it resembles a typical case.

Mental Prototype

A mental image or best example that embodies the most typical characteristics of a particular category or concept.