During the Current Year,Kayla Recognizes a $40,000 Section 1231 Gain

question 36

Multiple Choice

During the current year,Kayla recognizes a $40,000 Section 1231 gain on sale of land and a $22,000 Section 1231 loss on the sale of land.Prior to this,Kayla's only Section 1231 item was a $10,000 loss six years ago.Kayla is in the 28% marginal tax bracket.The amount of tax resulting from these transactions is

• A)$2,700.
• B)$3,600.
• C)$4,000.
• D)$5,040.

---

Definitions:

Franchising

A method of doing business wherein a franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a recurring payment, and often a percentage of the franchisee's revenue.

Franchisors

Individuals or companies that grant a license to others allowing them to operate a business under the franchisor's brand and business model.

Experience

The knowledge or skill acquired by a period of practical involvement in or exposure to events or activities.

Franchised Businesses

Companies that operate under the model where individuals (franchisees) are granted the rights by a franchisor to operate a business under the franchisor's brand and system in exchange for a fee.