Which of the Following Is True Regarding the §1231 Look-Back

question 129

Multiple Choice

Which of the following is true regarding the §1231 look-back rule?

• A)It only applies when a §1231 loss occurs.
• B)It only applies when a §1231 gain occurs.
• C)It only applies when a §1231 gain occurs and there is a nonrecaptured §1231 loss in the prior five years.
• D)It only applies when a §1231 gain occurs and there is a nonrecaptured §1231 gain in the prior five years.
• E)None of the choices are correct.

---

Definitions:

Financial Records

Documents that track the financial activities and condition of a business, including income statements, balance sheets, and cash flow statements.

Small Business Manager

An individual responsible for overseeing the operations, strategies, and personnel of a small business, ensuring efficiency and profitability.

Cake-Decorating

The art and skill of creating designs on cakes using icing, fondant, and other edible decorations, often for special occasions.

Industrial Reorganization

The process of restructuring the operations, structure, or ownership of companies in an industry to increase efficiency or adapt to market changes.