Learn or Find Bookkeeping, Payroll, Accounting, QuickBooks, or Tax Terms
Select a letter below or enter a term or keyword.
Section 1245 property
Section 1245 property includes decreciable personal property and other depreciable property (other than buildings or their structural components) used in manufacturing, production, or extraction or used in furnishing transportation, communications, electrical energy, gas, water, or sewage disposal services. When Section 1245 property is disposed of, any gain is treated as ordinary income to the extent of depreciation deducted. Thus, although Section 1245 property may also be a Section 1231 asset, Section 1231 gain will be realized on the disposition only to the extent that the gain realized exceeds the post-1961 depreciation. Single-purpose agricultural and horticultural structures and storage facilities used in connection with the distribution of petroleum and its primary products that are placed in service after 1980 are included in the Section 1245 property category. Such property placed in service before 1981 is Section 1250 property. A gain on the sale or disposition of Section 1245 property is taxed as ordinary income to the extent of the depreciation deductions allowed.