Vertical,Inc.,has a 2013 net § 1231 gain of $67,000 and had a $22,000 net § 1231 loss in 2012.For 2013,Vertical's net § 1231 gain is treated as:

Question

Quizplus · Accepted Answer

Net § 1231 gains and losses are treated as long-term capital gains and losses, respectively, unless there is a net loss, in which case they are treated as ordinary losses. In this case, there is a net § 1231 gain of $45,000 ($67,000 - $22,000), which is treated as long-term capital gain, and a remaining $22,000 ordinary gain. Therefore, choice C is correct.