Vertigo, Inc

question 52

Multiple Choice

Vertigo, Inc., has a 2018 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2017. For 2018, Vertigo's net § 1231 loss is treated as:

• A) Ordinary loss.
• B) Ordinary gain.
• C) Capital loss.
• D) Capital gain.
• E) None of the above.

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Definitions:

Income Taxes Payable

The amount of income tax a company owes to the government that has not yet been paid, typically recorded as a liability on the balance sheet.

Comparative Balance Sheet

A financial statement that presents the assets, liabilities, and shareholders' equity at different time points to analyze trends.

Net Cash

The amount of cash available after accounting for cash inflows and outflows, reflecting the actual liquidity position of an individual or business at a specific point in time.

Operating Activities

Business activities related to daily operations, including sales, supply chain management, and other core functions.