Blair,whose tax rate is 24%,sells one tract of land at a gain of $29,000 and another tract of land at a gain of $11,000.Both tracts of land are Sec.1231 property.She has never had any other Sec.1231 transactions.How are the gains taxed?
A)ordinary income of $40,000 taxed at 28%
B)a net capital gain of $40,000 which is not taxed
C)a net capital gain of $40,000 taxed at 15%
D)ordinary income of $40,000 taxed at 25%

Question

Quizplus · Accepted Answer

Both tracts of land are Sec. 1231 property, which means their gains will be netted together. The net gain of $40,000 will be taxed as a capital gain at a rate of 15%.

Blair,whose Tax Rate Is 24%,sells One Tract of Land at a Gain