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The original cost or other basis of property increased by capital improvements and reduced by depreciation and losses.
Cash or other property not permited to be received tax-free in certain nontaxable transactions. The receipt of boot will generally cause a realized gain to be recognized to the extent of the lesser of the fair market value of such boot received or the amount of realized gain.
Generally all assets except inventory, notes and acconts receivable, and depreciable and nondepreciable property used in trade or business. Capital assets generally consist of property held for investment and property held for personal use.
Occurs when money or other property is received for property that has been destroyed, damaged, stolen, or condemned. Generally the recognition of any realized gain resuting from an involuntary conversion can, at the taxpayer's election, be deferred if the taxpayer reinvests the proceeds of conversion within a specified period of time in property that is similar or related in service or use.
An exchange of property held for productive use in a trade or business or for investment (excluding inventory, stocks, bonds, and partnership interests) for property of a like kind. Real property must be exchanged for real property, personal property must be exchanged for personal property within the same general asset class. Generally no gain is recognized unless unlike property (boot) is received.
Long-term capital gain or loss
Gain or loss realized from the sale or exchange of a capital asset held for more than one year.
Generally no loss can be recognized from the sale or exchange of property between related taxpayers. Related taxpayers include members of a family (spouse, bothers, sisters, ancestors, and lineal descendants), and an individual and a more than 50% owned entity. Additionally, related-taxpayer gains that might otherwise be classifed as capital or Sec. 1231 gains may instead be taxed as ordinary income.
Sectoin 1231 Property
Depreciable and nondepreciable property used in a trade or business and held for more thatn one year. Inventory, accounts and notes receivable, US government publications, copyrights, literary, musical, or artistic compositions in the hands of their creator are excluded from the definition.
Section 1245 Property
Generally depreciable personal property used in a trade or business or held for the production of income (e.g. machinery, equipment, trucks, autos)
Section 1245 Recapture
The gain from the sale or exchange of Sec. 1245 property must be reported as ordinary income to the extent of the lesser of (1) all depreciation (including straight-line), or (2) the recognized gain.
Section 1250 Property
Any real property (e.g. buildings) that (1) is not sec. 1245 property and (2) is subject to the allowance of depreciation.
Section 1250 Recapture
The gain from the sale or exchange of sec. 1250 property must be reported as ordinary income to the extent that actual depreciation deductions exceeded what staight-line would have been. If Sec. 1250 property was held 12 mo. or less, gain on disposition is recaptured as ordinary income to the extent of all depreciation (including straight-line).
A loss from the sale of stock or securities is disallowed because the taxpayer, within 30 days before or after the sale, has aquired stock or securities that are substantially identical to those sold.
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