Blair,whose tax rate is 28%,sells one tract of land at a gain of $29,000 and another tract of land at a gain of $11,000.Both tracts of land are Sec.1231 property.She has never had any other Sec.1231 transactions.How are the gains taxed?
A)ordinary income of $40,000 taxed at 28%
B)a net capital gain of $40,000 which is not taxed
C)a net capital gain of $40,000 taxed at 15%
D)ordinary income of $40,000 taxed at 25%

Question

Quizplus · Accepted Answer

C)The 1231 gains are treated as LTCG taxed at a maximum of 15%.($29,000 + $11,000 = $40,000).

Blair,whose Tax Rate Is 28%,sells One Tract of Land at a Gain