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Flow Chart (Section 1231, 1245, 1250 Assets)

This flow chart outlines the tax treatment of gains and losses from the sale of different types of business assets under sections 1231, 1245, and 1250 of the tax code. Section 1231 assets include gains treated as long term capital gains or ordinary losses. Section 1245 assets include gains treated as ordinary income up to prior depreciation deductions. Section 1250 assets include gains treated as ordinary income up to additional depreciation deductions, with remaining gains taxed as capital gains.

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1K views1 page

Flow Chart (Section 1231, 1245, 1250 Assets)

This flow chart outlines the tax treatment of gains and losses from the sale of different types of business assets under sections 1231, 1245, and 1250 of the tax code. Section 1231 assets include gains treated as long term capital gains or ordinary losses. Section 1245 assets include gains treated as ordinary income up to prior depreciation deductions. Section 1250 assets include gains treated as ordinary income up to additional depreciation deductions, with remaining gains taxed as capital gains.

Uploaded by

JayV
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
  • Asset Categorization Flowchart: Illustrates the categorization of assets for tax purposes according to sections 1231, 1245, and 1250, using a flowchart format.

FLOW CHART [SECTION 1231, 1245, 1250 ASSETS]

All depreciation
LOOK BACK taken =ordinary
1245 ASSETS
5 years
(Ordinary) Depreciable business
GAIN personal property Remaining Gain
1231 Gain = 0/15%
1231
ASSETS
LOSS REMAINING
(Ordinary) GAIN Straight Line Depreciation
1250 ASSETS =Unrecaptured 1250 gain
= 25%
All depreciable
real estate
Remaining Gain
=1231 Gain
=0/15%

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