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:

Marginal Productivity

The additional output that is produced by using one more unit of a particular input while keeping other inputs constant.

Marginal Cost

The additional expense incurred from producing and selling one more unit of a good or service.

Profits

The financial gain realized when the amount earned from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Output

The total amount of goods or services produced by a company, industry, or economic system.