This year Pranav had the gains and losses noted below on property,plant and equipment used in his business.Each asset had been held longer than one year.

A review of Pranav's reporting of Sec.1231 transactions for the prior five years indicates a net Sec.1231 loss of $14,000 three years ago and a net Sec.1231 gain of $8,000 last year (before the five-year lookback).Pranav will recognize

Question

This year Pranav had the gains and losses noted below on property,plant and equipment used in his business.Each asset had been held longer than one year.

A review of Pranav's reporting of Sec.1231 transactions for the prior five years indicates a net Sec.1231 loss of $14,000 three years ago and a net Sec.1231 gain of $8,000 last year (before the five-year lookback).Pranav will recognize

Quizplus · Accepted Answer

D) The casualty gain will be treated as Sec. 1231 gain and will be combined with the $12,000 condemnation loss and $21,000 Sec. 1231 gain, resulting in a net Sec. 1231 gain of $26,000. The five-year lookback will require that $6,000 be treated as ordinary gain (prior $14,000 Sec 1231 loss less previously recaptured $8,000 gain), and the $20,000 balance will be treated as LTCG.

This Year Pranav Had the Gains and Losses Noted Below