To what does the term "depreciable" property refer?

The term "depreciable" property specifically refers to assets that are used in a business or held for the production of income, which is why the choice that highlights property generating income or being used in a business is correct. These properties, such as machinery, equipment, and buildings, lose value over time due to wear and tear, obsolescence, or market factors. The IRS allows businesses to recover the cost of these assets through depreciation deductions over their useful lives, acknowledging that the value of the asset diminishes with time and use in producing income or facilitating business operations.

The other options do not accurately characterize depreciable property. For instance, merely stating that the property is purchased outright does not necessarily relate to its depreciation status. Additionally, items that can be resold may include personal assets that do not fit the criteria for depreciation, such as collectibles or inventory. Likewise, properties owned by the government are not typically classified under the same framework as depreciable property for tax purposes, since they often do not generate income in the same way that business assets do.