The following gains and losses pertain to Arnold's business assets that qualify as Sec. 1231 property. Arnold does not have any nonrecaptured net Sec. 1231 losses from previous years, and the portion of gain recaptured as ordinary income due to the depreciation recapture provisions has been eliminated.
$\begin{array}{ll}
\text { Loss from hurricane damage } & \$ 25,000 \
\text { Loss due to condemnation } & \$ 20,000 \
\text { Gain due to the sale of Sec. } 1231 \text { property } & \$ 16,000
\end{array}$
Describe the specific tax treatment of each of these transactions.

Question

The following gains and losses pertain to Arnold's business assets that qualify as Sec. 1231 property. Arnold does not have any nonrecaptured net Sec. 1231 losses from previous years, and the portion of gain recaptured as ordinary income due to the depreciation recapture provisions has been eliminated.
 $\begin{array}{ll}
\text { Loss from hurricane damage } & \$ 25,000 \
\text { Loss due to condemnation } & \$ 20,000 \
\text { Gain due to the sale of Sec. } 1231 \text { property } & \$ 16,000
\end{array}$
 Describe the specific tax treatment of each of these transactions.

Quizplus · Accepted Answer

The Answer of The following gains and losses pertain to Arnold's business assets that qualify as Sec. 1231 property. Arnold does not have any nonrecaptured net Sec. 1231 losses from previous years, and the portion of gain recaptured as ordinary income due to the depreciation recapture provisions has been eliminated.
 $\begin{array}{ll}
\text { Loss from hurricane damage } & \$ 25,000 \
\text { Loss due to condemnation } & \$ 20,000 \
\text { Gain due to the sale of Sec. } 1231 \text { property } & \$ 16,000
\end{array}$
 Describe the specific tax treatment of each of these transactions.

The Following Gains and Losses Pertain to Arnold's Business Assets