During the Current Year,Danika Recognizes a $30,000 Section 1231 Gain

question 113

Multiple Choice

During the current year,Danika recognizes a $30,000 Section 1231 gain and a $22,000 Section 1231 loss.Prior to this,Danika's only Section 1231 item was a $15,000 loss two years ago.Danika must report a(n)

• A)$8,000 net LTCG.
• B)$8,000 ordinary income.
• C)$15,000 ordinary income.
• D)$8,000 ordinary income and $7,000 net LTCG.

---

Definitions:

Government Bond

A type of investment where you lend money to a government in exchange for an agreed rate of interest over a certain period of time.

Apple Stock

Shares of ownership in Apple Inc., a multinational technology company known for its electronics and software.

Proprietorship

A form of business organization owned by a single individual who is responsible for its debts and entitled to its profits.

Personal Tax Rate

The percentage at which an individual's income is taxed by the government.