Pierce Has a $16,000 Sec

question 589

Multiple Choice

Pierce has a $16,000 Sec. 1231 loss, a $12,000 Sec. 1231 gain, and a salary of $50,000. What is the treatment of these items in Pierce's AGI?

• A) Pierce has a LTCG of $12,000 and a net ordinary income of $34,000.
• B) Pierce has net LTCG of $9,000 and $37,000 of net ordinary income.
• C) The 1231 gains and losses are treated as ordinary gains and losses making Pierce's AGI for the year $46,000.
• D) Pierce has a $3,000 LTCL which is deductible for AGI making AGI $47,000. He also has a $1,000 LTCL carryover.

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