Final answer:
The statement, "Rental use depreciable machinery held more than 12 months is an example of a § 1231 asset," is True
Step-by-step explanation:
The statement is true; depreciable machinery for rental use held over 12 months is classified as a § 1231 asset, which may lead to more favorable capital gains tax rates on profits from sales.
Under the Internal Revenue Code, Section 1231 covers the taxation of property used in a trade or business on a more favorable basis. Assets including depreciable machinery used in a business, which are held for longer than 12 months, fall into this category. This classification typically makes gains from the sale of such assets subject to capital gains tax rates rather than ordinary income tax rates, provided the overall net Section 1231 gain exceeds the net Section 1231 losses.
However, it's important to consult the specific tax guidelines or a tax professional since this area can become quite complex, particularly when there's a mix of gains and losses from different types of Section 1231 transactions throughout the year.