Final answer:
False, The statement about §1231 assets including all assets used in business is false. §1231 assets refer to specific depreciable business property held for over a year and receive different tax treatment than regular business assets.
Step-by-step explanation:
The statement that §1231 assets include all assets used in a trade or business is false. While §1231 assets do pertain to certain types of assets used in a trade or business, not all assets qualify as §1231 assets. §1231 assets are a specific tax category under the U.S. Internal Revenue Code that includes depreciable property and real property (like buildings and equipment), that are used in a trade or business and held for more than one year.
Some examples might be rental property, certain vehicles, or machinery. The significance of §1231 assets lies in the tax treatment of gains and losses on their disposition; they can be taxed at a more favorable capital gains tax rate rather than as ordinary income.
To fully understand how assets are accounted for, one can look at the balance sheet, which lists a firm's assets and liabilities, or explore how a bank's T-account works, to see how assets, liabilities, and bank capital (net worth) are organized.