The Section 1231 Netting Procedure Involves Several Steps

question 94

Multiple Choice

The Section 1231 netting procedure involves several steps. What is the proper order of these steps?
I.All Section 1231 gains and losses for the year are netted.
II.All casualty (theft) gains and losses on Section 1231 property are netted.
III.Current-year net Section 1231 gain is netted against any Section 1231 ordinary loss deductions taken in the previous 5 years.
​

• A)Statements I, III, and II.
• B)Statements II, I, and III.
• C)Statements III, I, and II.
• D)Statements III, II, and I.
• E)Statements I, II, and III.

---

Definitions:

Employee

An individual who works part-time or full-time under a contract of employment, contributing labor and expertise to an employer.

Customer

An individual or business that purchases goods or services from another entity, often considered the most significant component in the business world.

Stakeholders

Individuals or groups that have an interest or stake in the outcome of a project, initiative, or company.

Corporate Shareholders

Individuals or entities that own shares in a corporation and have potential financial gains or losses depending on the company's performance.