Vertigo,Inc. ,has a 2015 net § 1231 loss of $64,000 and had a $32,000 net § 1231 gain in 2014.For 2015,Vertigo's net § 1231 loss is treated as:
A)Ordinary loss.
B)Ordinary gain.
C)Capital loss.
D)Capital gain.
E)None of the above.

Question

Quizplus · Accepted Answer

Net § 1231 losses are treated as ordinary losses, so Vertigo's 2015 net § 1231 loss of $64,000 would be treated as an ordinary loss. The fact that they had a net § 1231 gain in 2014 is not relevant for determining the treatment of the 2015 loss.