Vertical,Inc. ,has a 2014 net § 1231 gain of $67,000 and had a $22,000 net § 1231 loss in 2013.For 2014,Vertical's net § 1231 gain is treated as:
A)$45,000 long-term capital gain and $22,000 ordinary loss.
B)$67,000 ordinary gain.
C)$45,000 long-term capital gain and $22,000 ordinary gain.
D)$67,000 capital gain.
E)None of these.

Question

Quizplus · Accepted Answer

The 2013 § 1231 loss is a lookback loss and converts $22,000 of the 2014 net § 1231 gain into ordinary gain.The $45,000 remaining of the $67,000 2014 net § 1231 gain is treated as long­term capital gain.