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Chapter 15. Recording Your Assets > Tax Consequences of Sales of Business Asset...

Tax Consequences of Sales of Business Assets

When you dispose of a business asset, you have to report your gain or loss on your income tax return. The tax treatment of the transaction is determined by the type of the asset. If the asset is a depreciable asset, the IRS explains that you might have to recognize all or part of the gain as ordinary income.

If you have a gain on the sale of the asset, the gain can be treated as ordinary or capital. You might be entitled to favorable tax rates on the capital gain.


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