Section 1231 Tax Rules: Selling Rental Property and Business Real Estate
Selling rental property or business real estate involves more than calculating the difference between the selling price and the original purchase price. The federal tax result can depend on Internal Revenue Code Section 1231, depreciation recapture, prior Section 1231 losses, suspended passive losses, installment sale rules, and the structure of the transaction.
Section 1231 is particularly important because qualifying property can receive favorable treatment on both sides of the calculation. When Section 1231 gains exceed Section 1231 losses for the year, the net amount can receive long term capital gain treatment. When qualifying losses equal or exceed the gains, the resulting Section 1231 loss is generally ordinary rather than capital.
That favorable framework does not mean every gain from rental or business property is taxed at a capital gain rate. Depreciation recapture is calculated first, the Section 1231 netting rules are applied next, and prior Section 1231 losses can convert current gain back to ordinary income.
For broader guidance on rental property taxation, depreciation, exchanges, passive losses, and investor planning, see my Real Estate Tax Planning resource page.
Key Tax Takeaways
- Section 1231 generally applies to depreciable property and real property used in a trade or business and held for more than one year.
- Property held primarily for sale to customers does not qualify for Section 1231 treatment.
- Investment land is generally a capital asset rather than Section 1231 property unless the land is used in a trade or business.
- Depreciation recapture under Sections 1245 and 1250 is determined before the remaining gain enters the Section 1231 calculation.
- Section 1245 can convert gain attributable to depreciation into ordinary income.
- For many buildings depreciated using the straight line method, Section 1250 ordinary income recapture is limited or zero, but unrecaptured Section 1250 gain may still be subject to a maximum 25 percent federal rate.
- All qualifying Section 1231 gains and losses for the year are generally netted together.
- The five year Section 1231 lookback rule can convert current net Section 1231 gain into ordinary income.
- Installment reporting generally does not defer Section 1245 or Section 1250 recapture income.
- A Section 1031 exchange can defer qualifying gain, but recognized gain and depreciation related consequences still require analysis.
- Cost segregation can materially change the tax consequences when a property is sold because separate building components may be subject to different recapture rules.
What Is Section 1231 Property?
Section 1231(b)(1) generally defines property used in a trade or business as depreciable property used in the trade or business and real property used in the trade or business when the property has been held for more than one year.
For real estate investors and business owners, qualifying property can include:
- Residential rental buildings used in a trade or business
- Commercial rental real estate used in a trade or business
- Office buildings used in an operating business
- Warehouses and industrial buildings
- Land used in a trade or business
- Machinery and equipment used in a trade or business
- Other qualifying depreciable business property
The more than one year holding period is important. Property used in a trade or business but held for one year or less generally does not receive Section 1231 treatment on sale.
Rental Property Is Not Section 1231 Property Merely Because It Produces Rent
Section 1231 requires property to be used in a trade or business. When an income producing property does not rise to the level of a trade or business, the disposition can instead be governed by the capital asset rules, although depreciation recapture rules can still apply to depreciable property.
The activity classification should therefore be established before applying Section 1231.
How Is Section 1231 Different From a Capital Asset?
Section 1221 generally defines a capital asset broadly, subject to specific exclusions. Traditional investments such as stocks, securities, and investment land commonly fall within the capital asset rules.
Section 1231 property occupies a different category. It is generally business property rather than a capital asset, but Section 1231 can cause net qualifying gains to receive long term capital gain treatment.
| Property Type | Typical Federal Character |
|---|---|
| Stock held as an investment | Capital asset |
| Land held solely for investment | Generally a capital asset |
| Rental building used in a trade or business and held more than one year | Generally Section 1231 property |
| Land used in a trade or business and held more than one year | Generally Section 1231 property |
| Real estate held primarily for sale to customers | Generally ordinary business property, not Section 1231 property |
Is Land Section 1231 Property?
Land can qualify as Section 1231 property even though land is not depreciable.
Section 1231(b)(1) separately includes real property used in a trade or business and held for more than one year. A parcel of land used in an operating business or qualifying rental activity can therefore fall within Section 1231.
Land held solely as an investment generally remains a capital asset. Land held primarily for sale to customers in the ordinary course of a real estate business is excluded from Section 1231.
Land and Building Must Be Analyzed Separately
When a building and land are sold in the same transaction, the amount realized must generally be allocated between the depreciable property and the land based on their respective fair market values for purposes of determining depreciation related gain.
The IRS instructions for Form 4797 specifically require separate treatment of depreciable property and land in this situation.
Does a Real Estate Developer or Flipper Receive Section 1231 Treatment?
Not when the property is held primarily for sale to customers in the ordinary course of the taxpayer's trade or business.
Section 1231(b)(1)(B) expressly excludes this type of property. Section 1221(a)(1) also excludes property held primarily for sale to customers from the definition of a capital asset.
The result is generally ordinary business income rather than Section 1231 gain or traditional capital gain.
The distinction can be significant for real estate investors who both hold rental properties and acquire properties for development or resale. Classification is based on the purpose for which the particular property is held rather than a single label applied to the taxpayer.
What Does Primarily Held for Sale Mean?
In Malat v. Riddell, 383 U.S. 569 (1966), the United States Supreme Court interpreted the word primarily in the property held for sale exclusion to mean principally or of first importance.
Accordingly, a property does not lose favorable disposition treatment merely because a sale was one possible outcome. The taxpayer's principal purpose for holding the property remains central to the analysis.
Rental History Does Not Guarantee Investor Treatment Forever
The purpose for holding real property can change. A property originally acquired and operated as an investment or rental may later be converted into property held principally for sale to customers. Conversely, property acquired for development can present different facts if its purpose and use materially change.
The facts surrounding acquisition, operation, development, marketing, and disposition should be reviewed before assuming Section 1231 treatment.
Calculate the Gain or Loss on the Property
The starting point is the amount realized from the sale compared with the property's adjusted tax basis.
Adjusted basis generally begins with cost or another applicable basis and is then adjusted for capital improvements, depreciation, and other required basis adjustments.
Depreciation is particularly important. Section 1016 generally requires basis adjustments for depreciation allowed or allowable. Failing to claim depreciation that should have been claimed does not necessarily preserve the property's tax basis for a later sale.
Simple Adjusted Basis Example
Assume an investor allocates $500,000 of an acquisition price to a rental building and later makes $50,000 of capital improvements. During the ownership period, $170,000 of depreciation is allowed or allowable.
Before considering other basis adjustments, the building's adjusted basis would generally be $380,000:
$500,000 original building basis plus $50,000 of capital improvements less $170,000 of depreciation equals $380,000.
Apply Depreciation Recapture Before Section 1231 Netting
A common mistake is to calculate the total gain from a rental property sale and immediately assume that the entire gain will receive long term capital gain treatment.
That is not the correct ordering.
When depreciable property is sold at a gain, the applicable depreciation recapture rules under Sections 1245 and 1250 are applied before the remaining gain enters the Section 1231 netting calculation.
For a more detailed discussion, see Depreciation Recapture When Rental or Business Property Is Sold .
Section 1245 Can Produce Ordinary Income
Section 1245 generally applies to depreciable personal property and certain other depreciable or amortizable property.
When Section 1245 property is sold at a gain, prior depreciation or amortization can cause gain to be recharacterized as ordinary income. In general terms, Section 1245 ordinary income is limited by both the gain on the property and the applicable prior depreciation or amortization.
Only gain remaining after Section 1245 recapture can potentially enter the Section 1231 calculation.
Example: Section 1245 Recapture
Assume a depreciable asset originally cost $80,000. The taxpayer has claimed $50,000 of depreciation, leaving a $30,000 adjusted basis. The asset is later sold for $65,000.
The taxpayer has a $35,000 gain. Because the gain does not exceed the $50,000 of depreciation, the $35,000 gain can generally be treated as ordinary income under Section 1245 rather than Section 1231 gain.
Section 1250 Real Estate Works Differently
Section 1250 applies to depreciable real property that is not Section 1245 property.
Section 1250 ordinary income recapture generally focuses on additional depreciation, meaning depreciation in excess of the amount determined using the straight line method.
As a result, many residential and commercial buildings placed in service after 1986 and depreciated using the required straight line MACRS method have little or no ordinary income recapture under Section 1250 solely from regular building depreciation.
That does not mean the depreciation disappears from the tax calculation.
Unrecaptured Section 1250 Gain Can Be Subject to a Maximum 25 Percent Rate
Gain attributable to depreciation on Section 1250 property can fall within the unrecaptured Section 1250 gain rules of Section 1(h)(6).
For an individual, this portion of long term capital gain can be subject to a maximum federal income tax rate of 25 percent rather than the conventional maximum rates applicable to other long term capital gain.
Unrecaptured Section 1250 gain should not be confused with ordinary income recapture under Section 1250. They are separate tax concepts.
Example: Sale of a Depreciated Rental Building
Assume a rental building has an original depreciable basis of $500,000. During ownership, $150,000 of straight line depreciation is allowed or allowable, leaving an adjusted building basis of $350,000.
If the net amount realized that is properly allocated to the building is $700,000, the building produces a $350,000 gain.
Assuming no Section 1250 ordinary income recapture applies, up to $150,000 of the gain attributable to prior depreciation can enter the unrecaptured Section 1250 gain calculation. The remaining gain may qualify for other long term capital gain treatment after the Section 1231 netting and lookback rules are applied.
How Does Cost Segregation Affect the Tax When a Property Is Sold?
Cost segregation can accelerate depreciation deductions by identifying components that qualify for shorter recovery periods. Those accelerated deductions can create substantial tax benefits during ownership.
The depreciation history must also be considered when the property is sold.
A cost segregation study can identify assets that are Section 1245 property rather than part of the Section 1250 building. Those assets may be subject to ordinary income recapture when sold at a gain.
A property sale after cost segregation can therefore contain several different tax components:
- Gain or loss on land
- Gain or loss on the Section 1250 building
- Ordinary income recapture on applicable Section 1245 assets
- Potential unrecaptured Section 1250 gain
- Remaining Section 1231 gain or loss
- Potential Section 1231 lookback recharacterization
The sales price should be allocated among the separate assets based on supportable fair market values. The depreciation schedule and the cost segregation study should therefore be available before the sale is reported.
Cost Segregation Should Be Modeled Through the Exit
The value of accelerated depreciation should not be measured only by the deduction generated in the acquisition year. The analysis should also consider the expected holding period, future depreciation, passive loss limitations, sale value, and potential recapture when the property is eventually disposed of.
Net All Section 1231 Gains and Losses for the Year
Section 1231 is an annual netting provision. The tax character of one qualifying property sale cannot always be determined by looking at that transaction alone.
Section 1231(a) generally requires qualifying gains and losses for the taxable year to be compared.
If Section 1231 Gains Exceed Section 1231 Losses
When qualifying Section 1231 gains exceed qualifying Section 1231 losses, the gains and losses are generally treated as long term capital gains and long term capital losses, subject to the five year lookback rule discussed below.
If Section 1231 Gains Do Not Exceed Section 1231 Losses
When Section 1231 gains do not exceed Section 1231 losses, Section 1231(a)(2) provides that the gains and losses are not treated as gains and losses from sales or exchanges of capital assets.
The resulting net Section 1231 loss is therefore generally ordinary in character rather than a capital loss.
Example: Multiple Property Sales in the Same Year
Assume a taxpayer has a $120,000 Section 1231 gain from one qualifying property and an $45,000 Section 1231 loss from another qualifying property during the same taxable year.
Before considering the five year lookback rule, the taxpayer has a $75,000 net Section 1231 gain.
The $120,000 gain is not independently characterized without considering the $45,000 loss. Section 1231 operates through the annual netting process.
An Ordinary Section 1231 Loss Is Not Necessarily an Unlimited Current Deduction
Ordinary character avoids the capital loss limitation, but other provisions of the Internal Revenue Code can still affect whether and when a loss is deductible.
Depending on the facts, the at risk rules under Section 465, the passive activity rules under Section 469, the excess business loss limitation under Section 461(l), basis rules, or other provisions may still affect the tax result.
Step 4Apply the Five Year Section 1231 Lookback Rule
A current year net Section 1231 gain does not automatically receive long term capital gain treatment.
Section 1231(c) requires the taxpayer to review the five most recent preceding taxable years for nonrecaptured net Section 1231 losses.
Current net Section 1231 gain is treated as ordinary income to the extent of those remaining nonrecaptured losses.
The rule prevents a taxpayer from receiving an ordinary deduction for a Section 1231 loss in one year and then immediately receiving preferential capital gain treatment on an offsetting Section 1231 gain in a later year.
Example: Five Year Lookback
Assume a taxpayer had a $40,000 net Section 1231 loss in 2023. No later Section 1231 gain has yet absorbed that loss.
In 2026, the taxpayer has an $110,000 net Section 1231 gain.
The first $40,000 of the 2026 net gain is generally recharacterized as ordinary income under Section 1231(c). The remaining $70,000 can retain long term capital gain character, subject to the other applicable rules.
Only Nonrecaptured Prior Losses Continue to Matter
The lookback calculation does not simply total every Section 1231 loss reported during the preceding five years.
Section 1231(c)(2) reduces prior net losses by amounts already used to recharacterize Section 1231 gains in intervening years. Once a prior loss has been fully taken into account under the lookback rule, it does not recharacterize another future gain.
For a more detailed explanation, see Section 1231 Lookback Rule: How Prior Losses Can Turn Gain Into Ordinary Income .
Step 5Determine the Final Tax Character and Applicable Rates
After depreciation recapture, annual Section 1231 netting, and the five year lookback rule have been applied, the remaining amounts can be assigned their final federal tax character.
A single rental property sale can therefore generate more than one category of taxable income.
| Possible Tax Component | Potential Federal Treatment |
|---|---|
| Section 1245 depreciation recapture | Ordinary income |
| Section 1250 ordinary income recapture, when applicable | Ordinary income |
| Section 1231 gain recharacterized by the five year lookback rule | Ordinary income |
| Unrecaptured Section 1250 gain | Long term capital gain subject to a maximum federal rate of 25 percent |
| Remaining net Section 1231 gain | Generally long term capital gain |
Section 1231 Gain Does Not Automatically Mean a 15 Percent Tax Rate
The final federal rate depends on the character of each component of the gain, the taxpayer's taxable income, prior depreciation, prior Section 1231 losses, and other provisions.
For depreciated real estate, unrecaptured Section 1250 gain is particularly important because that portion of the gain can be subject to a maximum 25 percent federal rate.
Can Net Investment Income Tax Apply to a Rental Property Sale?
Potentially.
Section 1411 imposes a 3.8 percent tax on the lesser of an individual's net investment income or modified adjusted gross income above the applicable statutory threshold.
Gain from property associated with a passive rental activity can be included in net investment income. Different treatment can apply when the property is held in a trade or business that is not a passive activity and is not otherwise described in Section 1411(c)(2).
Net investment income tax should therefore be modeled separately rather than assumed to apply or not apply solely because the asset is rental real estate.
How Do Suspended Passive Losses Affect a Rental Property Sale?
A taxable sale can have an additional consequence when the rental activity has suspended passive losses under Section 469.
Section 469(g) contains a special rule when a taxpayer disposes of the entire interest in a passive activity to an unrelated person in a transaction in which all realized gain or loss is recognized.
A qualifying complete taxable disposition can therefore make suspended passive losses deductible while the property sale itself generates taxable gain.
The two calculations should be modeled together.
For a detailed discussion, see Suspended Passive Rental Losses: Four Ways Real Estate Investors Can Use Them .
Why the Sale Gain and Passive Loss Release Must Be Combined
Assume a rental activity has $90,000 of suspended passive losses and a proposed fully taxable sale will generate substantial gain.
Looking only at the gross gain can overstate the projected taxable income if the disposition qualifies for the Section 469(g) rules. Looking only at the suspended losses can understate the tax if the property also generates depreciation related gain and Section 1231 gain.
A useful projection calculates both sides of the transaction together.
Can Section 1231 Gain Be Reported Using an Installment Sale?
In many cases, yes. Section 453 generally permits qualifying gain to be recognized over time when at least one payment is received after the taxable year of sale.
An important exception applies to depreciation recapture.
Section 453(i) requires recapture income that would be treated as ordinary income under Section 1245 or Section 1250 to be recognized in the year of disposition. Gain in excess of that recapture income can then generally be taken into account under the installment method if the transaction otherwise qualifies.
Example: Installment Sale With Recapture
Assume a qualifying property sale produces $300,000 of total gain, including $60,000 that must be recognized as Section 1245 recapture income.
The $60,000 recapture amount is generally recognized in the year of sale even if the seller receives only part of the purchase price that year. The remaining eligible gain can potentially be reported under the installment method as payments are received.
Dealer Real Estate Has a Separate Installment Sale Limitation
Section 453 generally excludes dealer dispositions from normal installment sale treatment, subject to specific statutory exceptions.
Real property held for sale to customers in the ordinary course of a trade or business can therefore present both an ordinary income classification issue and an installment reporting limitation.
Installment Planning Requires More Than Spreading the Sales Price
Before agreeing to seller financing, the projected tax should separately identify depreciation recapture, eligible installment gain, interest income, Section 1231 character, prior Section 1231 losses, and any passive loss consequences.
How Does a Section 1031 Exchange Interact With Section 1231?
Section 1031 generally allows nonrecognition of gain or loss when qualifying real property held for productive use in a trade or business or for investment is exchanged for qualifying real property to be held for productive use or investment.
Section 1031 does not change the underlying character of the property into something unrelated to Section 1231. Instead, it can defer recognition that would otherwise occur.
If part of the gain is recognized in the exchange, the recognized amount must still be analyzed under the applicable depreciation recapture and property character rules. The instructions for Forms 8824 and 4797 specifically coordinate recognized gain from exchanges involving trade or business real property.
Property Held for Sale Does Not Qualify
Section 1031(a)(2) excludes real property held primarily for sale. A taxpayer cannot convert dealer property into qualifying exchange property merely by routing the sale proceeds through a qualified intermediary.
Cost Segregation Can Add Complexity to an Exchange
Current Section 1031 treatment is limited to real property. A cost segregation study may have identified separate assets with tax classifications that differ from the building itself.
Before an exchange, the depreciation schedule should therefore be reviewed to determine which property is being transferred, which property qualifies for nonrecognition treatment, and whether any current recognition or recapture issues remain.
A Section 1031 Exchange and a Taxable Sale Can Produce Very Different Results
A taxable sale may recognize gain but also trigger the release of qualifying suspended passive losses. A Section 1031 exchange may defer gain while leaving suspended passive losses subject to Section 469.
The correct comparison is the projected after tax result of each transaction, not simply the amount of gain deferred.
Where Is Section 1231 Gain or Loss Reported?
Form 4797, Sales of Business Property, is the principal federal form used to report dispositions of qualifying business property.
The reporting sequence depends on the type of property and transaction.
- Depreciable Section 1245 and Section 1250 property sold at a gain generally enters Form 4797 Part III so depreciation recapture can be determined.
- Section 1231 items that are not required to begin in Part III are generally reported in Part I.
- The annual Section 1231 net gain is tested against nonrecaptured Section 1231 losses from the preceding five years.
- Remaining qualifying long term capital gain flows into the applicable Schedule D calculation.
- Installment sales generally also require Form 6252.
- Qualifying like kind exchanges generally require Form 8824.
Review the Depreciation Schedule Before Closing
The tax return for the year of sale should not be the first time the depreciation history is reconstructed. Before closing, the taxpayer should have a complete fixed asset and depreciation schedule identifying original basis, improvements, cost segregation components, depreciation allowed or allowable, adjusted basis, and prior dispositions.
What Should Be Reviewed Before Selling Rental or Business Property?
A useful preclosing tax projection should generally address:
- Original property basis and acquisition allocation
- Capital improvements made during ownership
- Depreciation allowed or allowable
- Any cost segregation study and separate asset components
- Current adjusted tax basis
- Expected gross sales price and transaction costs
- Allocation of value between land, building, and other assets
- Potential Section 1245 ordinary income recapture
- Potential Section 1250 ordinary income recapture
- Potential unrecaptured Section 1250 gain
- Other Section 1231 gains or losses expected during the year
- Nonrecaptured Section 1231 losses from the prior five taxable years
- Suspended passive losses associated with the activity
- Whether Section 469(g) can apply to the disposition
- Potential net investment income tax
- Installment sale terms if seller financing is contemplated
- Section 1031 alternatives if an exchange is being considered
- Federal estimated tax consequences
- Applicable state income tax and sourcing consequences
Performing this analysis before the transaction closes can identify tax consequences that cannot be changed after the sale has already been completed.
Frequently Asked Questions About Section 1231 and Real Estate Sales
What property qualifies for Section 1231 treatment?
Section 1231 generally applies to depreciable property and real property used in a trade or business and held for more than one year. Specific exclusions apply, including inventory and property held primarily for sale to customers in the ordinary course of business.
Does rental property qualify for Section 1231 treatment?
Rental real estate used in a trade or business and held for more than one year can qualify as Section 1231 property. If the property is held for investment and the activity does not constitute a trade or business, different capital asset rules can apply.
Is land Section 1231 property?
Land used in a trade or business and held for more than one year can qualify as Section 1231 property even though land is not depreciable. Land held solely for investment is generally a capital asset, while land held primarily for sale to customers is generally ordinary business property.
What happens when Section 1231 property is sold at a loss?
Section 1231 gains and losses are generally netted for the year. If Section 1231 gains do not exceed Section 1231 losses, the resulting net loss is generally ordinary rather than capital. Other loss limitation provisions can still affect the timing or amount of the deduction.
How is Section 1231 gain taxed?
If Section 1231 gains exceed losses for the year, the net amount can generally receive long term capital gain treatment after depreciation recapture and the five year lookback rule are applied. Different portions of a real estate gain can nevertheless be taxed under different federal rate rules.
Is all gain from selling rental property taxed at capital gain rates?
No. Sections 1245 and 1250 can create ordinary income recapture, Section 1231(c) can recharacterize gain as ordinary income, and unrecaptured Section 1250 gain can be subject to a maximum 25 percent federal rate.
What is unrecaptured Section 1250 gain?
Unrecaptured Section 1250 gain is a category of long term capital gain generally associated with prior depreciation on Section 1250 real property. For individuals, it can be subject to a maximum federal rate of 25 percent. It is different from ordinary income recapture under Section 1250.
How does cost segregation affect a property sale?
Cost segregation can create separate depreciable assets with different tax classifications. Section 1245 assets can generate ordinary income recapture when sold at a gain, while the building itself may be subject to Section 1250 and unrecaptured Section 1250 gain rules.
What is the Section 1231 five year lookback rule?
Section 1231(c) generally converts current net Section 1231 gain into ordinary income to the extent of remaining nonrecaptured net Section 1231 losses from the five preceding taxable years.
Does a real estate flipper receive Section 1231 treatment?
Property held primarily for sale to customers in the ordinary course of a trade or business is excluded from Section 1231. Gain on dealer property is generally ordinary business income. The property's actual purpose and use must be evaluated from the facts.
Can Section 1231 property be sold using the installment method?
A qualifying sale can generally use the installment method when the requirements of Section 453 are satisfied. Section 453(i), however, generally requires Section 1245 and Section 1250 recapture income to be recognized in the year of sale rather than deferred with later payments.
How does a Section 1031 exchange affect Section 1231 gain?
A qualifying Section 1031 exchange can defer recognized gain on eligible real property. If gain is recognized as part of the exchange, the recognized amount must still be analyzed under the applicable depreciation recapture and property character rules.
Where is Section 1231 gain reported?
Section 1231 transactions are generally reported through Form 4797. Depreciable property sold at a gain often begins in Part III for the recapture calculation, while Section 1231 transactions enter the Part I netting process. Remaining long term capital gain is then coordinated with Schedule D.
Final Takeaway
Section 1231 can provide favorable tax treatment when rental property, business real estate, or other qualifying business assets are sold. But the final tax result cannot be determined by simply multiplying the total gain by a capital gain tax rate.
The correct analysis begins by determining whether the property qualifies for Section 1231. The adjusted basis and total gain or loss are then calculated, depreciation recapture is applied, all qualifying Section 1231 transactions for the year are netted, and the five year lookback rule is considered.
For real estate, the calculation can also involve land allocation, Section 1245 assets from cost segregation, Section 1250 property, unrecaptured Section 1250 gain, suspended passive losses, installment sale treatment, Section 1031 planning, net investment income tax, and state income tax.
Those calculations are most useful before the transaction closes, while the timing and structure of the sale can still be evaluated.
Model the Tax Consequences Before Selling Real Estate
I assist real estate investors and business owners with preclosing property sale analysis. The review can include adjusted basis, depreciation schedules, cost segregation components, Section 1245 and Section 1250 treatment, unrecaptured Section 1250 gain, Section 1231 lookback exposure, suspended passive losses, installment sale terms, Section 1031 alternatives, net investment income tax, and state tax consequences.
The objective is to calculate the expected tax result before closing and compare available transaction structures while planning options still remain available.
Schedule a ConsultationThis article provides general federal income tax information. The tax consequences of a property disposition depend on the property's use, holding period, adjusted basis, depreciation history, asset classification, prior Section 1231 gains and losses, passive activity status, transaction structure, ownership structure, and other facts. State income tax rules can differ from federal treatment.
