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FEDERAL INCOME, ESTATE & GIFT TAX PROJECT 1 (QUESTIONS FOR THE TAX ADVISORY GROUP RELATING TO DISCUSSION DRAFTS 17-20)

handle is hein.ali/aliftp0269 and id is 1 raw text is: R~latng t6 D~~i~DaftsNbs.17-.20*
'I. Classification or Gain or LOss on Dispositions of Business
1. General Treatment.
a* -,Should all gain or loss on dispositions of business
property be classified as ordinary?
b. Even though gain or loss on some dispositions of,
business property by taxpayers other than corpora-
tions is to be capital, should all gain or loss of
a corporation (other than an investment company)
be classified as ordinary?
c. If gain or loss on some dispositions of business prop-.
erty is to be capital, should the distinction be drawn
between assets which are a part of permanent business
capital (whose disposition will produce capital gain
or loss) and assets which are a part of current busi-
ness capital (whose disposition will produce ordinary
income or loss)?
See Section X1221.
2. Depreciable Property. If some depreciable assets are to-be
classified as capital assets, should the following treat-.
ment be provided with respect to gain or loss on. disposi-
tions of such depreciable assetcs: (1) a net loss on dis-
positions of depreciable capital assets is classified as
ordinary, (2) a net gain on dispositions of 'depreciable
,capital assets is classified as ordinary to the extent
of depreciatloh previously allowed or allowable, '(3)  a
net.gain in excess of depreciation allowed or allowable
is classified as capital?
See Section X1231 (The proposed treatment would replace-
present Section X1231.
3. Property Held. for Sale to Customers   Dual Treatment.
Should'provision be made for dual treatment on the dis'
pqstiin of real property which is held primarily f6r dsale
atthe ~i~me of its disposition but which was previously
held'bthe -taxpayer as a cpital asset for a considerab!6
4period,,* (unfdqr, IdUalase        fo a cosd6r,
treatment gain or loss which acorued'
Swhile the Pr~pertWa&id' -as a capital asset would.be
*:,!MBracketed questionS are' of subsidiary importance.

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