Proctor Inc

question 21

Multiple Choice

Proctor Inc.was incorporated in 2011 and adopted a calendar year.Here is a schedule of Proctor's net Section 1231 gains and (losses) reported on its tax returns through 2016. In 2017,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:

Summer Wages

Compensation paid to employees for work performed during the summer season, often applied to temporary or seasonal positions.

Compounded Quarterly

Interest calculation method where interest is added to the principal sum so that each following period's interest is calculated on a growing principal.

Annual Interest

The amount of interest to be paid or earned over a one-year period, usually expressed as a percentage of the principal.

Investing

The act of allocating resources, usually money, in order to generate income or profit.