Final answer:
Section 1245 recapture applies irrespective of how long a § 1245 asset is held, and the claim that it only applies if the asset is held for longer than one year is false. Depreciation recapture can occur even if the asset is held for less than a year.
Step-by-step explanation:
The statement that Section 1245 recapture only applies if the § 1245 asset is held for longer than one year is false. The Section 1245 recapture applies regardless of the holding period of the asset. When a Section 1245 asset, which typically includes depreciable personal property and certain real property, is sold for more than its adjusted basis, the gain up to the amount of accumulated depreciation is recaptured and taxed as ordinary income, not as a long-term capital gain.
This means that even if the asset was held for less than a year, the recapture rules could still apply. . Section 1245 recapture is a tax provision that requires individuals to treat certain types of property as ordinary income, rather than capital gain, upon its sale or disposition.