Nilex Company Sold Three Operating Assets This Year

question 28

Multiple Choice

Nilex Company sold three operating assets this year.Nilex recognized a $14,100 Section 1231 loss on the first sale,a $20,000 Section 1231 loss on the second sale,and a $19,600 Section 1231 gain on the third sale.Which of the following statements is true?

• A)Nilex can deduct its $14,500 net Section 1231 loss.
• B)Nilex can deduct its $34,100 net Section 1231 loss and can treat its $19,600 Section 1231 gain as a capital gain.
• C)Nilex must treat its $14,500 net Section 1231 loss as a capital loss.
• D)None of the above statements is true.

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Substances whose production, sale, or use is prohibited by law.

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