An Individual Has the Following Recognized Gains and Losses from Disposition

question 2

Multiple Choice

An individual has the following recognized gains and losses from disposition of § 1231 assets (all the assets were vacant land) : $15,000 gain, $10,000 loss, $25,000 gain, and $2,000 loss. The individual has a $5,500 § 1231 lookback loss. The individual also has a $16,000 net short-term capital loss from the disposition of stock. Which of the following statements is correct?

• A) The taxpayer has $5,500 ordinary gain and $6,500 net long-term capital gain.
• B) The taxpayer has $12,000 net long-term capital gain.
• C) The taxpayer has $28,000 ordinary gain and $16,000 net short-term capital loss.
• D) The taxpayer has $5,500 ordinary loss and $6,500 net long-term capital gain.
• E) None of the above.

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Definitions:

Productivity Growth

An increase in the efficiency of production activities, enabling more output to be produced from the same amount of inputs.

Research and Development

The investigative activities a business conducts to improve existing products and procedures or to lead to the development of new products and procedures.

GDP Statistics

Quantitative data that measure the output of a country's economy, indicating economic health and progress by tracking changes in gross domestic product over time.

Standard of Living

A level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.