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:

Avoidance

A behavioral response aimed at evading certain situations, thoughts, or feelings that are perceived as unpleasant or stressful.

Exposure

A therapeutic technique aimed at reducing fear or anxiety by gradually and systematically exposing the person to the feared object or context.

PTSD

Post-Traumatic Stress Disorder, a mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.

Ethnic/Racial Minority

An ethnic/racial minority is a group within a country or society that has different national or cultural traditions from the main population and is less in number.