Bernice, a sole proprietor, sold two business assets during the year. As a resul

Question

Bernice, a sole proprietor, sold two business assets during the year. As a result, she has an ordinary loss and a § 1231 gain. The loss asset was office furniture that was held for eight months, and the gain asset is land that was held for five years. Why doesn't the ordinary loss offset the § 1231 gain?

Select:

a. Because the taxpayer failed to make a timely election

b. Because the § 1231 gain is treated as a long-term capital gain

c. Because the § 1231 gain is treated as a short-term capital gain

d. Because the § 1231 gain is treated as an ordinary gain

Explanation / Answer

Answer:

The correct answer to the given question is Option b. Because the § 1231 gain is treated as a long term capital gain.

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

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