In 2014, Tim sells Section 1245 property for $28,000 that he had purchased in 2008. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income?

Question

Quizplus · Accepted Answer

The gain from the sale of Section 1245 property is taxable as ordinary income to the extent of the depreciation taken. Tim claimed $7,000 in depreciation, so $7,000 of the gain is taxable as ordinary income.

In 2014, Tim Sells Section 1245 Property for $28,000 That