When a sole proprietorship is sold, the gain or loss is generally capital gain or loss.

Name: When a sole proprietorship is sold, the gain or loss is generally capital gain or loss.
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The gain or loss from the sale of a sole proprietorship is not treated as capital gain or loss because it involves the sale of individual assets of the business, which can include both capital assets and ordinary income assets. The treatment of each asset's gain or loss is determined based on its specific nature.

When a Sole Proprietorship Is Sold, the Gain or Loss