Free CPA Exam Deep Dive: Section 1231 Assets

In this month’s free Deep Dive video lecture, Prof. Greg Carnes, Ph.D., CPA, of the University of North Alabama, provides an in-depth look at Section 1231 assets and specifically Section 1245 recapture.

Section 1231 Assets

For a quick refresher, Section 1231 assets are defined as depreciable business property that has been held for more than a year. These assets can be buildings, machinery, land, timber and other natural resources, unharvested crops, cattle, livestock and leaseholds that are at least a year old.

Here’s Prof. Carnes’ Deep Dive on the topic:

As discussed in the video lecture, Section 1231 gains and losses are netted against each other in the same manner as capital gains and losses.  However, a net section 1231 gain is considered a capital gain, while a net loss is recorded as an ordinary loss.

We hope you found this month’s Deep Dive useful.