Lucy, a noncorporate taxpayer, experienced the following Sec. 1231 gains and losses during the years 2013 through 2018. Her first disposition of a Sec. 1231 asset occurred in 2014. Assuming Lucy had no capital gains and losses during that time period, what is the tax treatment in each of the years listed?Sec. 1231 GainsSec. 1231 Losses2014$10,000$ 8,0002015$18,000$23,0002016$ 9,000$13,0002017$22,000$16,0002018$25,000$17,0002019$11,000$18,000
What will be an ideal response?
| 2014 | $2,000 LTCG |
2016 $4,000 Ordinary loss
2017 $6,000 ordinary income due to Sec. 1231 recapture; leaves $3,000 available for later recapture
2018 $8,000 net gain-recapture $3,000 as ordinary income; $5,000 balance will be LTCG
2019 $7,000 Ordinary loss
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