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

question 91

Multiple Choice

During the current year,George recognizes a $30,000 Section 1231 gain on sale of land and a $18,000 Section 1231 loss on the sale of land.Prior to this,George's only Section 1231 item was a $14,000 loss six years ago.George must report a

• A)$12,000 net LTCG.
• B)$12,000 ordinary income.
• C)$14,000 ordinary income.
• D)$10,000 ordinary income and $2,000 net LTCG.

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Definitions:

Tax

A mandatory monetary fee or a different kind of tax placed on an individual or entity by a government agency.

Producer Surplus

The gap between the minimum amount that sellers are prepared to accept for a product or service and the higher price they actually get.

Consumer Surplus

The deviation between what consumers intend and are able to spend on a good or service compared to their final payment.

Tax

A financial charge or levy imposed by a government on individuals or entities to fund public expenditure, creating government revenue.