Section 1231, 1245, 1250

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    Topic
  • November 14, 2011 at 2:32 am #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)
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  • November 14, 2011 at 3:06 am #474055
    Anonymous
    Inactive

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

    November 14, 2011 at 3:06 am #474111
    Anonymous
    Inactive

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

    November 14, 2011 at 4:55 am #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

    November 14, 2011 at 4:55 am #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

    November 24, 2013 at 10:44 pm #474059
    Anonymous
    Inactive

    @ See Pee A

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

    Thanks and good luck

    November 24, 2013 at 10:44 pm #474116
    Anonymous
    Inactive

    @ See Pee A

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

    Thanks and good luck

    November 25, 2013 at 4:28 am #474061
    SeattleAccountant
    Member

    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 🙂

    November 25, 2013 at 4:28 am #474118
    SeattleAccountant
    Member

    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 🙂

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Viewing 8 replies - 1 through 8 (of 8 total)
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