Vertical, Inc

question 55

Multiple Choice

Vertical, Inc., has a 2012 net § 1231 gain of $67,000 and had a $22,000 net § 1231 loss in 2011.For 2012, Vertical's net § 1231 gain is treated as:

• A)$45,000 long-term capital gain and $22,000 ordinary loss.
• B)$67,000 ordinary gain.
• C)$45,000 long-term capital gain and $22,000 ordinary gain.
• D)$67,000 capital gain.
• E)None of the above.

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Definitions:

Offshoring

The practice of shifting work previously done by domestic workers to workers located abroad.

Trading Partner

A country or organization which engages in international trade with another entity, typically exchanging goods, services, or information.

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its trading partners, forming the basis of international trade.