Ashburn reported a $105,000 net §1231 gain in year 6.Assuming Ashburn reported $60,000 of nonrecaptured §1231 losses during years 1-5,what amount of Ashburn's net §1231 gain for year 6,if any,is treated as ordinary income?
A)$0.
B)$45,000.
C)$60,000.
D)$105,000.
E)None of thesE.The 1231 lookback rule recharacterizes $60,000 of the §1231 gain to ordinary income,the amount of the prior 5 year losses that received ordinary loss treatment.

Question

Quizplus · Accepted Answer

The 1231 lookback rule recharacterizes $60,000 of the §1231 gain to ordinary income, the amount of the prior 5 year losses that received ordinary loss treatment.

Ashburn Reported a $105,000 Net §1231 Gain in Year 6