Nilex Company sold three operating assets this year.Nilex recognized a $14,100 Section 1231 loss on the first sale,a $20,000 Section 1231 loss on the second sale,and a $19,600 Section 1231 gain on the third sale.Which of the following statements is true?
A)Nilex can deduct its $14,500 net Section 1231 loss.
B)Nilex can deduct its $34,100 net Section 1231 loss and can treat its $19,600 Section 1231 gain as a capital gain.
C)Nilex must treat its $14,500 net Section 1231 loss as a capital loss.
D)None of the above statements is true.

Question

Quizplus · Accepted Answer

The net Section 1231 loss is $14,500 ($14,100 loss + $20,000 loss - $19,600 gain), which can be deducted as an ordinary loss.

Nilex Company Sold Three Operating Assets This Year