An individual had the following gains and losses during 2017 on property held for the long-term holding period: sale of Orange common stock ($8,000 gain); sale of real property used in the taxpayer's business ($1,800 loss); destruction of real property used in the taxpayer's business by fire ($1,000 loss). Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The sale of real property used in the taxpayer's business is a § 1231 loss, which can be netted against § 1231 gains, including the gain from the sale of Orange common stock. The fire loss is also a § 1231 loss and can be netted against § 1231 gains. However, it cannot directly reduce the real property sale loss because the real property loss is already a § 1231 loss.

An Individual Had the Following Gains and Losses During 2017