Hans runs a sole proprietorship. Hans has reported the following net §1231 gains and losses since he began business. Net §1231 gains shown are before the look-back rule.Note: Leave no answers blank. Enter zero if applicable.YearNet §1231 Gains/(Losses)Year 1$ (68,000)Year 216,500Year 30Year 40Year 511,200Year 60Year 7 (current year)51,500 a. What amount, if any, of the year 7 (current year) $51,500 net §1231 gain is treated as ordinary income?

Section 1231 property is real or depreciable business property held for more than one year. A…

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Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter11: Investor Losses

Section: Chapter Questions

Problem 4CPA

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Question

Hans runs a sole proprietorship. Hans has reported the following net §1231 gains and losses since he began business. Net §1231 gains shown are before the look-back rule.

Note: Leave no answers blank. Enter zero if applicable.

Year	Net §1231 Gains/(Losses)
Year 1	$ (68,000)
Year 2	16,500
Year 3	0
Year 4	0
Year 5	11,200
Year 6	0
Year 7 (current year)	51,500

a. What amount, if any, of the year 7 (current year) $51,500 net §1231 gain is treated as ordinary income?

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