The §1231 Look-Back Rule Recharacterizes §1231 Gains If §1231 Losses

question 123

True/False

The §1231 look-back rule recharacterizes §1231 gains if §1231 losses have created ordinary losses in the last five years.

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Definitions:

Cash

Currency and other liquid instruments that are used to conduct transactions or settle debts.

Accounts Receivable

Funds that customers owe to a company for products or services already provided but not yet compensated for.

Accounts Payable

A bookkeeping record indicating a business's duty to settle a short-term financial debt with its lenders or vendors.

Cash Flows

The inflows and outflows of cash and cash equivalents, representing the operational, investing, and financing activities of a business.