Which of the following statements is correct?
A) When depreciable property is gifted to another individual taxpayer, the depreciation recapture potential is extinguished.
B) When depreciable property is inherited by a taxpayer, the depreciation recapture potential is extinguished.
C) When corporate depreciable property is distributed as a dividend, the depreciation recapture potential is generally not recognized.
D) When depreciable property is contributed to charity, the depreciation recapture potential has no effect on the amount of the charitable contribution deduction.
E) All of the above are correct.

Question

Quizplus · Accepted Answer

When depreciable property is inherited by a taxpayer, the depreciation recapture potential is extinguished. This means that the beneficiary of the inherited property is not required to pay the depreciation recapture tax if they sell the property at a gain. The other statements are incorrect.

Which of the Following Statements Is Correct