Section 1245

Section 1245

A section of the IRS tax code indicating that any depreciable property that is sold for more than the depreciated value qualifies for capital gains taxation rather than income taxation. Equally importantly, Section 1245 qualifies this type of property for favorable capital gains treatment: sellers pay less in capital gain tax than they otherwise would on this property. Section 1245 applies to real, personal, and intangible property so long as it can be depreciated and amortized. See also: Accounting.

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Section 1245 (26 U.S.C. §1245)

The Internal Revenue Code section that establishes rules regarding gains and losses on certain depreciable property,including real property.It is important because it contains definitions for something called “Section 1245 property.”This,in turn,is important in other tax laws defining benefits available for Section 1245 property. To find the law's text, see the instructions at Section (federal code).

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Section 1245

When depreciable personal property is sold, gain must be recaptured as ordinary income up to the amount of depreciation claimed. Section 1245 is the Internal Revenue Code section that requires this treatment. Also see "Recapture of Depreciation."