Which of the following is correct?
A)Improperly classifying a § 1231 loss as a capital loss might affect adjusted gross income.
B)Improperly classifying a capital loss as a § 1231 loss might affect adjusted gross income.
C)Misclassifying a § 1231 gain as a short-term capital gain might affect adjusted gross income.
D)Misclassifying a short-term capital gain as a § 1231 gain might affect adjusted gross income.
E)All of these.

Question

Quizplus · Accepted Answer

All options are correct because the classification of gains and losses affects how they are taxed, which in turn affects adjusted gross income. Section 1231 gains and losses have specific tax treatment different from that of capital gains and losses, and misclassification can lead to incorrect calculation of taxes and adjusted gross income.

Which of the Following Is Correct