An individual had the following gains and losses during 2013 on property held for the long-term holding period: sale of Orange common stock ($8,000 gain); sale of real property used in the taxpayer's business ($1,800 loss); destruction of real property used in the taxpayer's business by fire ($1,000 loss).Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The sale of real property used in the taxpayer's business is a § 1231 loss, which means it can be netted against any § 1231 gains. The fire loss is also a § 1231 loss and can be netted against any § 1231 gains. However, it cannot be used to offset the stock sale gain as that is a capital gain and not a § 1231 gain. Therefore, neither A, B, nor C is correct.

An Individual Had the Following Gains and Losses During 2013