Pierce has a $16,000 Sec.1231 loss,a $12,000 Sec.1231 gain,and a salary of $50,000.What is the treatment of these items in Pierce's AGI?
A)Pierce has a LTCG of $12,000 and a net ordinary income of $34,000.
B)The 1231 gains and losses are treated as ordinary gains and losses making Pierce's AGI for the year $46,000.
C)Pierce has a $3,000 LTCL which is deductible for AGI making AGI $47,000.He also has a $1,000 LTCL carryover.
D)Pierce has net LTCG of $9,000 and $37,000 of net ordinary income.

Question

Quizplus · Accepted Answer

Section 1231 gains and losses are treated as ordinary gains and losses, so Pierce's AGI for the year would be $46,000 ($50,000 salary minus the $4,000 net Section 1231 loss).

Pierce Has a $16,000 Sec