Westonci.ca is your go-to source for answers, with a community ready to provide accurate and timely information. Our platform provides a seamless experience for finding reliable answers from a knowledgeable network of professionals. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.
Sagot :
Answer:
This gain is characterized on Proctor's tax return as $15,900 ordinary gain and $9,100 Section 1231 gain.
Explanation:
The following sorted schedule of Proctor's net Section 1231 gains and (losses) reported on its tax returns through 2019 are given in the question.
2014 2015 2016 2017 2018 2019
$-0- $(3,800) $9,040 $(15,900) $-0- $-0-
The explanation of the answer is now given as follows:
The $9,040 Section 1231 profit in 2016 made the loss of $3,800 Section 1231 loss in 2015 to be recaptured in 2016.
Consequently, the only loss that must be recaptured in 2020 is the 2017 Section 1231 loss.
Therefore, we have:
Section 1231 gain = Gain on the sale of business land in 2020 - Section 1231 loss in 2017 = $25,000 - $15,900 = $9,100
Therefore, this gain is characterized on Proctor's tax return as $15,900 ordinary gain and $9,100 Section 1231 gain.
We appreciate your time. Please revisit us for more reliable answers to any questions you may have. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.
