[Anonymous]

Why would Sec. 1231 gain be excluded from ordinary income, but Sec. 1250 gain included?

[chitown87]

Likely because 1250 gain is ordinary income while 1231 gain is capital and thus is separately stated.

I'm not 100% sure what you're asking, but hopefully this answers it.

[Anonymous]

Thank you. Yes, so 1250 gain is an exception that treats capital gain as ordinary income.

[chitown87]

Sort of, yes. Section 1250 is a “recapture” provision where depreciation previously taken on a depreciable real property asset otherwise eligible for 1231 treatment is treated as ordinary income. Any gain above the amount previously taken as depreciation would be capital.

Hope this helps.

The same would apply to Section 1245 (personal property).

[Author]

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