Ashburn reported a $105,000 net §1231 gain in Year 6.Assuming Ashburn reported $60,000 of nonrecaptured §1231 losses during Years 1-5, what amount of Ashburn's net §1231 gain for Year 6, if any, is treated as ordinary income?
A)$0.
B)$45,000.
C)$60,000.
D)$105,000.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The $60,000 of nonrecaptured §1231 losses from previous years must be recaptured as ordinary income in Year 6, reducing the net §1231 gain treated as capital gain.

Ashburn Reported a $105,000 Net §1231 Gain in Year 6