Ask Question
25 October, 23:00

In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. 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

+5
Answers (1)
  1. 26 October, 02:20
    0
    Answer: $7,000

    Explanation:

    Section 1245 property refers to property that either could depreciate or has depreciated or been amortized showing that it refers to both tangible and intangible assets.

    If this asset is sold and there is a gain, the amount of the gain that is taxable as ordinary income is the amount up to the amount of depreciation.

    As there has been a gain in this sale because the sales price is more than the purchase price and the Depreciation is $7,000, that is the amount that will be taxable as ordinary income.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. Tim has claimed $7,000 in depreciation ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers