Question

WHICH OF SSC'S ASSETS ARE CONSIDERED HOT ASSETS UNDER Section 751(a)?

MULTIPLE CHOICE

1. Cash and accounts receivable.

2. Cash and Land.

3. Accounts receivable and land.

4. Accounts receivable and inherent recapture under section1245 in the equipment.

Answer 1

4. Accounts receivable and inherent recapture under §1245 in the equipment.

(The accounts receivable and inherent recapture recapture are considered hot assets under §751(a))

As per section 751(a), there are two categories of hot assets - unrealized receivables and inventory items. Sec. 751(c) provides the definition of unrealized receivables, while Sec. 751(d) defines inventory items.

There are three categories of unrealized receivables: goods, services, and recapture items.