Leslie buys a sculpture from a collector for resale in her gallery. She purchased the sculpture for $5,000 and sold it 24 months later for $9,000. What are the nature and the amount of the gain on the sale?
A) $4,000 gain subject to 28% tax rate.
B) $4,000 Section 1245 gain.
C) $4,000 ordinary income.
D) $5,000 ordinary gain and $4,000 Section 1231 gain.
Correct Answer:
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