Section 1245 of the U.S. tax code covers taxation on the gain from sales of tangible or intangible personal property that is being or has been depreciated. It includes machinery, vehicles and equipment used in manufacturing and intangible assets including patents, according to the Internal Revenue Service.
Section 1245 generally does not include buildings or structural components such as walls, garages, or heating and air conditioning systems, but some structures are specifically designed for a single purpose and cannot be easily converted to other use, the IRS notes. These structures are Section 1245 property. Examples include grain storage bins and silos, oil or gas storage tanks, blast furnaces, and brick kilns.