Section 1231 and Capital Gains and Losses
Response to the following problem:
Use the following information to answer Parts a. through c.
Period Property Was Held Amount of Gain or Loss
Nonbusiness bad debt 'Three years ($2,600)
Sale of equipment used in business Two months (1,500)
Sale of equipment used in business Two years (3,000)
Sale of corporate stock Five years 2,500
Sale of land used in business Four years 5,000
a. What, if any, is the amount of net short-term capital loss?
b. What, if any, is the amount of net Section 1231 gain or (loss)?
c. What, if any, is the ordinary loss deduction?