Pierce has a $16,000 Sec. 1231 loss, a $12,000 Sec. 1231 gain, and a salary of $50,000. What is the treatment of these items in Pierce's AGI?
A) Pierce has a LTCG of $12,000 and a net ordinary income of $34,000.
B) The 1231 gains and losses are treated as ordinary gains and losses making Pierce's AGI for the year $46,000.
C) Pierce has a $3,000 LTCL which is deductible for AGI making AGI $47,000. He also has a $1,000 LTCL carryover.
D) Pierce has net LTCG of $9,000 and $37,000 of net ordinary income.
B) The 1231 gains and losses are treated as ordinary gains and losses making Pierce's AGI for the year $46,000.
If, when netted, Sec. 1231 losses exceed Sec. 1231 gains, both are treated as ordinary. Therefore, AGI is $50,000 + ($12,000 - $16,000) = $46,000.
You might also like to view...
Which of the following is a medium of visual identity for a company?
A) annual reports B) dress codes C) press releases D) seminars E) trade shows
Which of the following search tools allows the user to ask questions in everyday English?
A) Forms-based searches B) Hashtags C) Natural language searches D) Boolean searches E) Keyword searches
In Synectics, which type of metaphor uses an image to represent the problem?
A) Fantasy analogy B) Personal analogy C) Physical analogy D) Symbolic analogy
Which of the following need NOT be stated in the first paragraph of an application letter to a company?
A. Your intent to apply for a position with the company B. The salary you expect from the company C. How you learned about the position you are applying for D. The position for which you are applying