Which of the following assets held by a cash basis accounting firm is a § 1231 asset?
A) An account receivable from a client.
B) A desk used in the business and held more than one year.
C) An investment in Orange Company common stock.
D) A computer used in the business, held more than one year, but fully depreciated under § 179 when acquired.
E) b. and d.

Question

Quizplus · Accepted Answer

A § 1231 asset is an asset held for more than one year and used in a trade or business. It includes tangible property (such as equipment or buildings) or intangible property (such as patents or copyrights) used in the business.

Choice B is a tangible property held for more than one year, and choice D is also a tangible property used in the business, held for more than one year and eligible for depreciation under § 179, both of which fit the definition of a § 1231 asset. The other choices, including an account receivable and an investment in stock, do not meet the criteria. Therefore, the best choice(s) are b. and d.

Which of the Following Assets Held by a Cash Basis