Brandon,an individual,began business four years ago and has never sold a §1231 asset.Brandon owned each of the assets for several years.In the current year,Brandon sold the following business assets: Assuming Brandon's marginal ordinary income tax rate is 32 percent,what effect do the gains and losses have on Brandon's tax liability?
A)$7,000 ordinary income,$1,000 §1231 loss,and $1,920 tax liability.
B)$6,000 ordinary income and $1,920 tax liability.
C)$7,000 §1231 gain and $2,240 tax liability.
D)$7,000 §1231 gain and $1,050 tax liability.
E)None of the choices are correct.

Question

Brandon,an individual,began business four years ago and has never sold a §1231 asset.Brandon owned each of the assets for several years.In the current year,Brandon sold the following business assets:  Assuming Brandon's marginal ordinary income tax rate is 32 percent,what effect do the gains and losses have on Brandon's tax liability?
A)$7,000 ordinary income,$1,000 §1231 loss,and $1,920 tax liability. 
B)$6,000 ordinary income and $1,920 tax liability. 
C)$7,000 §1231 gain and $2,240 tax liability. 
D)$7,000 §1231 gain and $1,050 tax liability. 
E)None of the choices are correct.

Quizplus · Accepted Answer

The Answer of Brandon,an individual,began business four years ago and has never sold a §1231 asset.Brandon owned each of the assets for several years.In the current year,Brandon sold the following business assets:  Assuming Brandon's marginal ordinary income tax rate is 32 percent,what effect do the gains and losses have on Brandon's tax liability?
A)$7,000 ordinary income,$1,000 §1231 loss,and $1,920 tax liability. 
B)$6,000 ordinary income and $1,920 tax liability. 
C)$7,000 §1231 gain and $2,240 tax liability. 
D)$7,000 §1231 gain and $1,050 tax liability. 
E)None of the choices are correct.

Brandon,an Individual,began Business Four Years Ago and Has Never Sold