1) Which of the following is NOT an ordinary income asset a. Accounts receivable b. Artistic works in the hands of the creator or author c. Inventory d. Commercial real estate 2) What type of income is taxed at the highest rate? a. Ordinary income b. Capital Gain Income c. Section 1231 gain income d. Unrecaptured Section 1250 depreciation e. 3) Which of the following is not true of Section 1231/1245 property a. If the amount realized is equal to the adjusted basis of the asset, there is no gain or loss b. If the amount realized is less than the adjusted basis of the asset, the resulting loss is always treated as a capital loss c. If the amount realized is greater than the adjusted basis, but the amount of gain is less than the amount of depreciation taken, then Section 1245 treats the gain (i.e., recaptures the gain) as ordinary gain. d. If the amount realized is greater than the adjusted basis and the amount of gain is greater than the depreciation taken, then the gain up to amount of depreciation up to the amount of depreciation taken is treated as ordinary gain under Section 1245, and gain in excess of depreciation is treated as capital gain under Section 1231