Multiple Attempts Not allowed This test can only be taken once. Force Completion

Question

Multiple Attempts Not allowed This test can only be taken once. Force Completion This test can be saved and resumed at any point untl time has expired The timer well continue to run if you leave the test Show Tmer e Question Completion Statuse Close Window Mong to another question will save this response. Question 97 of 100 Question 97 1 points Save Answer vehicie, Inc, has a 2015 net s 1291 gain ot 556,000 and had a 515,000 zes s 1231 ioss in 2014. For 2015, Vehiele's et s i23 gain is reated o a s56,000 long-cexm capital gain ana 5,000 ordsnazy icas. b 556,000 ordinazy gain. ,000 long-term capitai gasn snd S15.000 e dinary gain 956.000 iong-tcapstal qain. aesson of 100 Moving to another question will save this response Close Window

Explanation / Answer

when there is a net section 1231 gain , the tax payer must first recapture as ordinary income any unrecaptured 1231 gain losses in the previous 5 year( that is 15,000 will be treated as ordinary income ) . The remaining net section 1231 gain enters the capital asset netting process and can offset capital losses .If the taxpayer has no capital gain or losses the net section 1231 gain is included in the taxpayer income for taxation . in this case the net section 1231 gain of the corporation is taxed as ordinary income .(that is 41,000 will be treated as ordinary income )

So the total ordinary income 15,000 + 41,000 = 56,000

so B is the correct answer

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.