Why gains from depreciable property sold to related taxpayer

Reference no: EM13906462

1. Explain why gains from depreciable property sold to a related taxpayer are treated as ordinary income under §1239.

2. Bingaman Resources sold two depreciable §1231 assets during the year. One asset resulted in a large gain (the asset was sold for more than it was purchased for) and the other in a small loss. Describe the §1231 netting process for Bingaman.

Reference no: EM13906462

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