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Leon sold residential rental property he had owned for three years. As part of this sale,...

Leon sold residential rental property he had owned for three years. As part of this sale, Leon realized gain on the sale of the rental house he was depreciating using regular MACRS. Which Code section describes the gain on the LAND? a) §1231. b) §1245. c) §1250. d) §1254.

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Expert Solution

Answer: b

Section 1231: this is used in property relating to business or trade, but not for residential property.

Section 1245: this is used in personal property and subject to the depreciation allowance. Therefore, this is the appropriate section of describing gain.

Section 1250: this is used in depreciation recapture, which is not required here.

Section 1254: this is used in mineral properties like, oil, gas, etc. Therefore, this is not used in land.

ekkarill92 answered 1 year ago
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