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Sales, exchanges, involuntary conversions, and abandonments all qualify as asset dispositions. Amount Realized How is the amount realized on a sale or exchange determined? Recognized Gain Explain the difference between a realized gain and a recognized gain? Solution: Section 1231 assets are depreciable realty and personalty used in a trade or business, nondepreciable trade or business realty (and long-term capital gain property held for the production of income that is involuntarily converted).

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