Mark owns an unincorporated business and has $20,000 of Section 1231 gains and $22,000 of Section 1231 losses.He must report a net capital loss of $2,000 on his tax return.

Question

Quizplus · Accepted Answer

Section 1231 gains and losses are reported as ordinary income or loss, not as capital gains or losses. Therefore, they do not impact net capital gains or losses. Mark would report his net Section 1231 loss of $2,000 on his tax return as ordinary loss.

Mark Owns an Unincorporated Business and Has $20,000 of Section