For 20x6 brandon manufacturing has a net section 1231 gain, Ask an Expert

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For 20X6, Brandon Manufacturing has a net Section 1231 gain of $28,000. Brandon reported the net Section 1231 gains or (losses) for the previous five years shown below. None of the losses ever caused a net Section 1231 gain in any year before 20X1 to be treated as an ordinary gain.

20X1 - ($14,000)
20X2 - (7,000)
20X3 - 9,000
20X4 - 6,000
20X5 - (2,000)

How much of the $28,000 Section 1231 gain realized in 20X6 is treated as ordinary income? How much is treated as a long-term capital gain?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9981282

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