The Sale of Machinery for More Than the Original Cost

question 37

Multiple Choice

The sale of machinery for more than the original cost basis (before depreciation) ,used in a trade or business,and held for more than one year results in the following types of gain or loss?

• A)Capital and Ordinary.
• B)Ordinary only.
• C)Capital and §1231.
• D)§1245 and §1231.
• E)None of thesE.Because the sales price exceeds the original basis,§1245 depreciation recapture and §1231 gain will be recognized.

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Definitions:

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