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Tamiko Buys a Painting from a Collector for Resale in Her

Question 86

Multiple Choice

Tamiko buys a painting from a collector for resale in her gallery for $4,500.She sold it 15 months later for $6,500.What are the nature and amount of the gain on the sale of the painting?


A) $2,000 gain subject to 28% collectibles tax rate.
B) $2,000 Section 1231 gain.
C) $2,000 Section 1245 gain.
D) $2,000 ordinary income.

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