Professional Documents
Culture Documents
Property Inherited
• Basis = FMV on date of death (unless electing alternate valuation
date- 6 months later, in which case basis = FMV on that date)
• Automatically considered to be held Long-Term
• NEVER included in gross income
• Distributed btw death and Alt valuation date, Basis = FMV @
Distribution
Cost Recovery
1) Section 179 = T/B depreciable property purchased from
unrelated party
• $150K can be expensed in year equipment placed in service
• Reduced $-for-$ for every dollar assets > $800K
○ Any amount disallowed may be CF indefinitely
○ CANNOT exceed business income during the year
Capital Gains/Losses
• Individuals -> Carry-Forward disallowed Capital Losses
indefinitely
• 1245 = depreciable personalty
○ Treat depreciation recapture as ordinary income
• 1250 = depreciable realty
○ “Excess” depreciation = ordinary income
○ Unrecaptured 1250 gain = 25% rate