Proctor Inc $\begin{array}{llcc}2014&2015&2016&2017&2018&2019 \\\$-0-&\$(3,800)&\$9,040&\$(15,900)&\$-0-&\$-0-\end{array}$ In 2020, Proctor Recognized a $25,000 Gain on the Sale

question 99

Multiple Choice

Proctor Inc. was incorporated in 2014 and adopted a calendar year. Here is a schedule of Proctor's net Section 1231 gains and (losses) reported on its tax returns through 2019. $\begin{array}{llcc}2014&2015&2016&2017&2018&2019 \\\$-0-&\$(3,800) &\$9,040&\$(15,900) &\$-0-&\$-0-\end{array}$
In 2020, Proctor recognized a $25,000 gain on the sale of business land. How is this gain characterized on Proctor's tax return?

• A) $25,000 Section 1231 gain.
• B) $19,700 ordinary gain and $5,300 Section 1231 gain.
• C) $15,900 ordinary gain and $9,100 Section 1231 gain.
• D) $25,000 ordinary gain.

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