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

question 76

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

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Definitions:

Withdraw

The act of removing funds from a bank account or the cessation of investment in a particular asset or undertaking.

Retire

The act of withdrawing from one's position or profession, often marking the end of one's career.

Invested Funds

Money or capital that has been invested in a business, project, or financial asset, often seeking to generate returns.

Annuity

A financial product that provides a series of payments made at equal intervals, which can be used as a retirement income strategy.