Section 1231, 1245, 1250

  • Creator
    Topic
  • #162747
    hopefulcpa28
    Member

    Can someone give me an overview on these?

    Here’s how I’m understanding, please let me know if I’m right/wrong/and/or completely off

    Section 1231: Real and Personal property used in business for over 12months.

    Gains: Section 1245 and 1250 gains at a lower rate (0% or 15%) (Gains from sale, exchange, etc…)

    Losses: Ordinary losses instead of capital losses. This way, you won’t have to wait for capital gains to offset your losses. Can deduct it as ordinary losses in the year instead.

    Section 1245: Personal property used in trade or business for over 12 months.

    Income: To the extent of accumulated depreciation. (Lesser or gain recognized or all accumulated depreciation).

    Rest of the gains are recognized as Section 1231 gains.

    No losses under section 1245.

    Section 1250: Real property used in trade or business for over 12 months

    Income: Recaptures only that portion of depreciation taken on real property that is in excess of straight line.

    No losses under Section 1250.

Viewing 8 replies - 1 through 8 (of 8 total)
  • Author
    Replies
  • #474055
    Anonymous
    Inactive

    i can help you, shoot me an email. cat_nguyen@yahoo.com

    #474111
    Anonymous
    Inactive

    i can help you, shoot me an email. cat_nguyen@yahoo.com

    #474057
    See Pee A
    Member

    Fairly simple way to do this for many problems.

    Sale price < NBV = ordinary loss

    Sale Price > NBV:

    up to NBV = cost recovery (no income or G/L)

    up to accum. depr. = depr. recapture (ordinary income)

    above NBV + AD (aka original cost) = S1231 gain

    BEC 86 (08/30/11)
    FAR 84 (10/13/11)
    REG 88 (11/08/11)
    AUD 86 (11/29/11)

    Exam prep - Becker self-study

    #474113
    See Pee A
    Member

    Fairly simple way to do this for many problems.

    Sale price < NBV = ordinary loss

    Sale Price > NBV:

    up to NBV = cost recovery (no income or G/L)

    up to accum. depr. = depr. recapture (ordinary income)

    above NBV + AD (aka original cost) = S1231 gain

    BEC 86 (08/30/11)
    FAR 84 (10/13/11)
    REG 88 (11/08/11)
    AUD 86 (11/29/11)

    Exam prep - Becker self-study

    #474059
    Anonymous
    Inactive

    @ See Pee A

    Just went over an example using your method. Works well !

    Thanks and good luck

    #474116
    Anonymous
    Inactive

    @ See Pee A

    Just went over an example using your method. Works well !

    Thanks and good luck

    #474061

    look at: https://www.another71.com/cpa-exam-forum/topic/section-1231-1245-1250-1251

    watch video I've posted long ago by Yaeger guy, hope it helps!

    Becker Class of Jan - Aug 2013: FARB DONE!!!!
    CPA license pending 🙂

    #474118

    look at: https://www.another71.com/cpa-exam-forum/topic/section-1231-1245-1250-1251

    watch video I've posted long ago by Yaeger guy, hope it helps!

    Becker Class of Jan - Aug 2013: FARB DONE!!!!
    CPA license pending 🙂

Viewing 8 replies - 1 through 8 (of 8 total)
  • You must be logged in to reply to this topic.