John Dutton sells a 2,500-acre ranch for $1,000,000 in cash, a note receivable of $1,000,000, and debt relief of $2,400,000. He also pays selling commissions of $60,000. In addition, John agrees to build a new barn on the property (cost $250,000) and spend $100,000 upgrading the fence on the property before the sale. What is John's amount realized on the sale?

Explain the difference between ordinary, capital and Section1231 assets. Give a few examples of each.

Explain Congress' rationale for depreciation recapture.

Compare and contrast Section 1245 recapture and Section 1250 recapture.