Orange,Inc

question 60

Multiple Choice

Orange,Inc.,has a 2011 net § 1231 gain of $45,000 and had a $72,000 net § 1231 loss in 2010.For 2011,Orange's net § 1231 gain is treated as:

• A) $45,000 ordinary loss.
• B) $45,000 ordinary gain.
• C) $45,000 capital loss.
• D) $45,000 capital gain.
• E) None of the above.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation.

Dividend

A payment made by a corporation to its shareholders, usually derived from the company’s profits.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with dividends that are paid out before those of common shareholders.

Common Stock

Shares representing ownership in a corporation, giving holders voting rights and a claim on a portion of the company’s profits through dividends.