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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Definitions:

James Prochaska

A psychologist best known for his role in developing the Transtheoretical Model of behavior change.

Behavior Changes

Modifications or transformations in human actions or reactions, often aimed at improving health, productivity, or social relationships.

Theory of Planned Behavior

A theory that predicts an individual's intention to engage in a behavior based on their attitudes, subjective norms, and perceived control over the behavior.

Reasonable People

Individuals who act with common sense and wisdom, making decisions based on rational thinking.