[Verse 1] When you sell that business truck or factory machine Twelve thirty-one awaits with hands both foul and clean It grants you capital gain treatment when the stars align But ordinary loss deduction when your numbers decline [Chorus] Best of both worlds, twelve thirty-one's the key Capital gains up, ordinary loss is free But lookback five years, recapture comes to play Twelve forty-five and fifty steal your gains away [Verse 2] Personal property sold triggers twelve forty-five Every dollar depreciated comes back alive As ordinary income, no escape route found What went down as deduction now turns back around [Chorus] Best of both worlds, twelve thirty-one's the key Capital gains up, ordinary loss is free But lookback five years, recapture comes to play Twelve forty-five and fifty steal your gains away [Verse 3] Real estate follows twelve fifty's gentler hand Only excess over straight-line gets reprimand The building's depreciation mostly stays as gain Just the accelerated portion feels recapture's pain [Bridge] Two sixty-seven blocks the loss when family's involved Brother, sister, spouse and children, problems to be solved Constructive ownership reaches through the corporate veil Attribution rules ensure related party sales fail [Chorus] Best of both worlds, twelve thirty-one's the key Capital gains up, ordinary loss is free But lookback five years, recapture comes to play Twelve forty-five and fifty steal your gains away [Outro] Five year lookback haunts your twelve thirty-one Net losses past will catch you when you run Recapture transforms your capital delight Back to ordinary income in the tax code's sight
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