Answer the following questions based on the U.S 2018 tax law:

What is not section 1231 property?

Account receivable

Forklift

Computer

Vehicle used 75% for business (actual method)

The current tax year is 2018. The following 1231 transactions occurred:

2011 sold property for $17,000. Tax basis of $23,000.

2014 sold property for $34,000. Tax basis of $50,000.

2018 sold property for $100,000. Tax basis of $70,000.

How much of the 1231 gain is considered capital in 2018?

You sell a machine with an adjusted tax basis of $200,000 for $225,000. The original purchase price was $215,000. The machine never had any capital additions applied to it. How much 1245 recapture will need to be reported as ordinary income?

You signed a contract 5 years ago to sell all the timber on your land for $500,000. In 2018, you cut your timber. You have a total tax basis of $120,000 in the timber. On Jan 1 2018, FMV for timber is $450,000. How much of the gain is consider ordinary income?

When determining net 1231 gain/loss, do you take out section 1245 gains before or after looking back 5 years for prior 1231 losses?

Before

After