ExpertHard1 markMultiple Choice
CPA · Question 48 · Area III: Property Transactions
Which of the following is a 'Section 1231 asset'?
Which of the following is a 'Section 1231 asset'?
Answer options:
A.
Inventory held for sale to customers.
B.
Depreciable equipment used in a business held for more than one year.
C.
A copyright held by the creator.
D.
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
B
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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