Which of the following is a 'Section 1231 asset'?

Answer options:

Inventory held for sale to customers.

Depreciable equipment used in a business held for more than one year.

A copyright held by the creator.

Accounts receivable arising from services.

How to approach this question

Section 1231 = PP&E held > 1 year.

Full Answer

B.Depreciable equipment used in a business held for more than one year.✓ Correct

Section 1231 assets are depreciable personal property or real property used in a trade or business and held for more than one year. Inventory, accounts receivable, and self-created copyrights are excluded.

Common mistakes

Thinking inventory is a capital or 1231 asset.

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