During the Current Year, George Recognizes a $30,000 Sec

question 822

Multiple Choice

During the current year, George recognizes a $30,000 Sec. 1231 gain on sale of land and a $18,000 Sec. 1231 loss on the sale of land. Prior to this, George's only Sec. 1231 item was a $14,000 loss six years ago. George must report a

• A) $10,000 ordinary income and $2,000 net LTCG.
• B) $14,000 ordinary income.
• C) $12,000 ordinary income.
• D) $12,000 net LTCG.

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Definitions:

Restructuring Strategy

A corporate management term referring to the act of reorganizing the legal, ownership, operational, or other structures of a company to make it more profitable or better organized for its present needs.

Merger

The combination of two or more companies into a single entity, often to leverage synergies, expand markets, or enhance efficiencies.

Liquidation

The process of bringing a business to an end and distributing its assets to claimants, often occasioned by bankruptcy or dissolution.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task.