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depreciation taken on section 1250 property, $3,326,457
(treated as patronage capital gain).
Miscellaneous Section 1231 Assets
During the tax year ending August 31, 1983,
petitioner sold in arm's-length transactions, retired, or
otherwise disposed of approximately 525 miscellaneous
business assets. These included tractors and other
vehicles, livestock, buildings, office furniture, and
office equipment. All of these assets were depreciable
assets described in section 1231(b), and had been used and
disposed of in the ordinary course of petitioner's
business activities. On its Federal income tax return for
the year ending August 31, 1983, petitioner reported a net
gain of $2,142,968 from the disposition of these assets.
This gain is comprised of the following components:
Amount realized in excess of cost basis$1,210,245
Aggregate sec. 1245 recapture 932,723
Total reported gain 2,142,968
Petitioner reported the portion of gain representing
aggregate section 1245 recapture, $932,723, as ordinary
patronage income. Petitioner reported the portion of the
gain representing the amount realized in excess of cost
basis, $1,210,245, as patronage capital gain under section
1231.
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