During the Current Year,Kayla Recognizes a $40,000 Sec

question 21

Multiple Choice

During the current year,Kayla recognizes a $40,000 Sec.1231 gain on sale of land and a $22,000 Sec.1231 loss on the sale of land.Prior to this,Kayla's only Sec.1231 item was a $10,000 loss six years ago.Kayla is in the 28% marginal tax bracket.The amount of tax resulting from these transactions is

• A)$2,700.
• B)$3,600.
• C)$4,000.
• D)$5,040.

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Definitions:

Executed Contract

A contract whose terms have been completely and satisfactorily carried out by both parties.

Written Contract

An agreement between parties that is expressed in written form and signed, making it legally binding.

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Fraud

A wrongful or criminal deception intended to result in financial or personal gain.