Ashburn Reported a $105,000 Net §1231 Gain in Year 6

question 19

Multiple Choice

Ashburn reported a $105,000 net §1231 gain in Year 6.Assuming Ashburn reported $60,000 of nonrecaptured §1231 losses during Years 1-5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?

• A)$0.
• B)$45,000.
• C)$60,000.
• D)$105,000.
• E)None of the choices are correct.

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Definitions:

Interest Rates

The cost of borrowing money, expressed as a percentage of the total amount of the loan, usually on an annual basis.

Investment

The allocation of resources, typically money, in order to gain profitable returns, as interest, income, or appreciation in value.

Federal Funds Target Rate

The interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight, set by the Federal Reserve to influence economic conditions.

Government Bonds

Debt securities issued by a government to finance its expenditures, typically featuring a fixed interest rate and maturity date.