The General Rule Is That a Net Section 1231 Loss

question 95

True/False

The general rule is that a net Section 1231 loss is treated as a capital loss and a net Section 1231 gain is treated as ordinary income.

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Definitions:

Posting

the process of transferring journal entries to respective accounts in the ledger.

Ledger

A book or electronic record used to record all of a company's financial transactions in chronological order.

T-account

A graphical representation used in accounting to illustrate the effects of transactions on account balances, with debits on the left and credits on the right.

Credit

A financial term denoting the ability to obtain goods or services before payment, based on the trust that payment will be made in the future.