Irby Inc Was Incorporated in 2005 and Adopted a Calendar Year

question 103

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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