CPA Exam Forum › REG › REG Review › 1231, 1245, 1250 assets for REG This topic contains 1 reply, has 2 voices, and was last updated by Jeff – another71.com 7 years ago. Viewing 2 posts - 1 through 2 (of 2 total) Author Posts May 12, 2010 at 7:30 am #157669 skiw97Participant Does anyone have a nice short trick to remember the key differences between the 3? No matter how many times I see the flashcards or review my notes, the differences really dont seem to stick, only the fact that they are all business assets held over a year. May 12, 2010 at 3:22 pm #228376 Jeff – another71.comKeymaster Section 1231 – depreciable personal, real property used in trade or business and held > 1 year -Special capital gain treatment on net gains from sales, exchanges of certain non-capital assets -All 1231 losses are treated as ordinary loss, they are deducted immediately. -Gains to the extend of accumulated depreciation = ordinary income -Gain for sale in excess of original cost = 1231 capital gain Section 1245 (machinery and equipment, gain only) -personal business property assets used in trade or business for over a year (autos) -Upon a sale of a 1245 asset all accumulated depreciation is recaptured as ordinary income -Any remaining gain is a capital gain under section 1231 Section 1250 (buildings, gains only) -real business property used in trade or business for over 1 year (warehouse) -Recaptures deprecation in excess of straight line Need Study Help? Ask Jeff. Author Posts Viewing 2 posts - 1 through 2 (of 2 total) You must be logged in to reply to this topic.