Irby Inc Was Incorporated in 2005 and Adopted a Calendar Year

question 95

Multiple Choice

Irby Inc. was incorporated in 2005 and adopted a calendar year. Here is a schedule of Irby's net Section 1231 gains and (losses) reported on its tax returns through 2010. In 2011, Irby recognized a $14,750 gain on the sale of business land. How is this gain characterized on Irby's tax return?

• A) $14,750 Section 1231 gain
• B) $10,890 ordinary gain and $9,415 Section 1231 gain
• C) $14,750 ordinary gain
• D) None of the above

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Definitions:

Abstinence Syndrome

A group of symptoms that occur upon sudden withdrawal from substances to which the body has become dependent, including drugs or alcohol.

Withdrawal Illness

Withdrawal illness refers to the physical and mental symptoms experienced by individuals who cease or reduce the intake of addictive substances to which they have become dependent.

Physical Dependence

A physiological state in which the body adapts to the presence of a drug or substance, leading to withdrawal symptoms when that substance is reduced or ceased.

Psychological Dependence

A condition in which an individual feels a compelling emotional need for a substance or behavior, despite potential negative consequences.