Section 1245 is the way the IRS returns the allowable or permitted depreciation or depreciation that a taxpayer has incurred on a 1231 property.
This return occurs at a time when the business is selling certain tangible or intangible personal property for a profit.
Section 1231 allows a business selling real estate to apply a higher ordinary rate of income to losses and a lower rate of capital gains to profits.
However, if a business has already received favorable tax treatment by accepting depreciation on its property and then selling that property at a profit, section 1245 reinstates the depreciation at normal income tax rates.