"In addition, a special punitive rule applies to convert gain otherwise taxable as capital gain to ordinary income. If the property sold or exchanged (a liquidation is treated as a sale) between related parties is depreciable by the buyer (regardless of whether the property was depreciable by the seller), ยง 1239 requires any gain recognized on the sale or exchange to be treated as ordinary income."
"In addition, a special punitive rule applies to convert gain otherwise taxable as capital gain to ordinary income. If the property sold or exchanged (a liquidation is treated as a sale) between related parties is depreciable by the buyer (regardless of whether the property was depreciable by the seller), ยง 1239 requires any gain recognized on the sale or exchange to be treated as ordinary income."