The purpose of Sec.1245 is to eliminate the advantage taxpayers would have if they were able to reduce ordinary income by depreciation deductions and also receive favorable Sec.1231 treatment when the asset was sold.

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Sec.1245 is designed to ensure that taxpayers do not receive an unfair tax advantage by claiming depreciation deductions on assets, and then benefiting from favorable treatment under Sec.1231 when those assets are sold. Instead, Sec.1245 requires certain types of property to be treated as ordinary income when sold, thus offsetting the potential tax benefits of depreciation deductions.

The Purpose of Sec