If a controlling shareholder sells depreciable property to a controlled corporation and the property is depreciable by the purchaser, any gain on the sale is a 1231 gain.

Question

Quizplus · Accepted Answer

The gain on the sale of depreciable property from a controlling shareholder to a controlled corporation is treated as ordinary income, not as Section 1231 gain, due to the related-party transaction rules.

If a Controlling Shareholder Sells Depreciable Property to a Controlled