Capital assets are forms of property with a relatively long life, often used in trade or business, that receive specific tax treatments when sold, resulting in either capital gain or capital loss.
Depreciable real estate refers to property used in a trade or business, or held for investment purposes, which is subject to depreciation under Section 167 of the Internal Revenue Code. Typically, land itself is not depreciable; however, land with minerals may be subject to depletion.
Investment income refers to the earnings generated from various types of investments, including dividends, interest, and gains made from the sale of investment properties.
Section 1031 of the Internal Revenue Code addresses tax-free exchanges of certain properties, primarily real estate, provided specific conditions are met.
A Tax-Free Exchange, Delayed is a transaction where property is traded with the promise to provide a like-kind replacement in the near future, allowing deferral of tax on the gain under stringent conditions.
Unimproved property refers to land that has not received any development, construction, or site preparation. It qualifies for capital gain or loss treatment, unlike improved property which is subject to ordinary income tax treatment.
Vacant land refers to land not currently being used for developed purposes. It might have utilities and off-site improvements but lacks significant buildings or structures.
