A section 1231 asset is sold. The asset produced a gain to the seller. This will usually be taxed using Capital Gain rates. T/F A Section 1231 asset is sold. The sale results in a loss to the seller. This sale will be taxed under the Capital Loss rules T/F If there is a net 1231 loss, it is treated as a short-term capital loss. T/F A Section 1231 asset is NEVER used in the regular course of business. T/F

* The fixed assets of a business are: a. Generally capital assets throughout their holding period. b. Generally not capital assets. c. Generally are held for investment. d. Generally are held for personal use. e. None of the above.

* Section 1250 property is: a. Depreciable real property. b. Depreciable intangible personal property. c. Depreciable tangible personal property. d. Inventory. e. None of the above.

* How is Passive Income different from Ordinary/Active Income? Choose the best answer. A. Passive Income lacks material participation. B. Ordinary income relates to the operation of a business, regardless of the taxpayers level of participation. C. Passive income only relates to investment income such as interest or dividends. D. Passive income is subject to a 15% income tax rate and is preferred.