Identify the type(s) of gain or loss that would be recognized on the following asset sales as capital, Section 1231, ordinary, Section 1245 or Section 1250.
-Gain on the sale of inventory.
A)capital
B)Section 1235
C)ordinary
D)Section 1249
E)Section 1254

Question

Quizplus · Accepted Answer

Gain on the sale of inventory is considered ordinary income because inventory is held primarily for sale to customers in the ordinary course of business, and thus any gain from its sale is treated as ordinary income, not capital gain.

Identify the Type(s) of Gain or Loss That Would Be