Fillmore's Net Section 1231 Gains and Losses Reported for the Past

question 127

Multiple Choice

Fillmore's net Section 1231 gains and losses reported for the past five years is presented below.
?
$$\begin{array} { r r } 2013 & \$ 15,000 \\2014 & 12,000 \\2015 & 5,000 \\2016 & ( 28,000 ) \\2017 & ( 13,000 ) \end{array}$$
In 2018, Fillmore has a $15,000 net Section 1231 gain. What amounts and character of income will Fillmore ultimately report in 2018 as a result of this net Section 1231 gain?

• A)$6,000 LTCG; $9,000 ordinary income
• B)$15,000 ordinary income
• C)$15,000 Section 1231 gain
• D)$9,000 LTCG; $6,000 ordinary income
• E)None of the above.

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Definitions:

Chemical Changes

Transformations that result in the formation of one or more new substances with different chemical and physical properties from the original substances.

Ocular Nerves

The nerves associated with the eye that are responsible for transmitting visual information from the retina to the brain.

Osteoporosis

A medical condition in which the bones become brittle and fragile from loss of tissue, typically as a result of hormonal changes, or deficiency of calcium or vitamin D.

Brittleness

The propensity of a substance to crack or fracture readily under pressure, without substantial bending or distortion.