During 2014, Thomas Has a Net Section 1231 Gain of $57,000

question 45

Multiple Choice

During 2014, Thomas has a net Section 1231 gain of $57,000. In 2013, Thomas reported a net Section 1231 loss of $60,000. What is the character of the 2014 gain?

• A) $60,000 long-term capital gain.
• B) $60,000 ordinary gain.
• C) $57,000 ordinary gain.
• D) $57,000 long-term capital loss.
• E) $57,000 long-term capital gain.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out.

Responsiveness

The ability of a company or system to quickly and effectively respond to customer needs, changes in the market, or operational challenges.

Transportation Costs

Expenses associated with the movement of goods or materials from one location to another, including shipping, freight, and logistics costs.

Annual Inventory Cost

The total expenses associated with maintaining and managing inventory over the course of a year.