An individual had the following gains and losses during 2014 on property held for the long-term holding period: sale of Orange common stock ($8,000 gain);sale of real property used in the taxpayer's business ($1,800 loss);destruction of real property used in the taxpayer's business by fire ($1,000 loss).Which of the following statements is correct?
A)The fire loss would reduce the real property sale loss.
B)The fire loss would reduce the stock sale gain.
C)The sale of real property loss would be netted against the stock sale gain.
D)The sale of real property is a § 1231 loss.
E)None of these.

Question

Quizplus · Accepted Answer

The sale of the Orange stock produces an $8,000 LTCG,which is fully includible in gross income.The real property sale results in a net §1231 loss of $1,800.The real property $1,000 fire loss is treated as an ordinary loss because there are no casualty gains against which it can be netted.

An Individual Had the Following Gains and Losses During 2014