Irby Inc Was Incorporated in 2009 and Adopted a Calendar Year

question 5

Multiple Choice

Irby Inc. was incorporated in 2009 and adopted a calendar year. Here is a schedule of Irby's net Section 1231 gains and (losses) reported on its tax returns through 2014. In 2015, 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.

---

Definitions:

Entire Output

The entire output contract is a commercial agreement in which a buyer agrees to purchase all of a seller's production of a specific good or service.

Intent Of The Parties

The actual and mutual intention of all parties involved in a contract or agreement, determined from their actions and words.

Certain Terms

Specific, clearly defined provisions within a contract or agreement that detail the expectations, duties, and rights of all parties involved.

Subject Matter

The topic or substance of a document, discussion, or work, especially referring to the content of a legal document or proceeding.