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:

Value-added Time

The period during which a product or service is being modified or enhanced to increase its value to the customer.

Residual Income

Residual income is the amount of income that an individual or business has after all personal debts and expenses, including a mortgage, have been paid.

Divisions

Distinct business units or sections within a company, each responsible for certain aspects of the organization's operations.

ROI

Return on Investment; a performance measure used to evaluate the efficiency of an investment by comparing the amount of return relative to the investment's cost.