The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in the following types of gain or loss?
A) Ordinary only.
B) §1245 and §1231.
C) Capital and §1231.
D) Capital and Ordinary.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

The sale of machinery for more than the original cost basis (before depreciation), used in a trade or business, and held for more than one year results in both §1245 and §1231 gain.

The Sale of Machinery for More Than the Original Cost