Question

Bourne Guitars, a corporation, reported a $211,000 net §1231 gain for year 6. Problem 11-51 Part-a a. Assuming Bourne reported $52,250 of nonrecaptured net §1231 losses during years 1–5, what amount of Bourne’s net §1231 gain for year 6, if any, is treated as ordinary income?

Answer 1

The amount of Bourne’s net §1231 gain for year 6 is $158.750

Step-by-step explanation:

Gain will be treated as gain under 1231 $211.000

Bourne's gain would be ordinary (- $52.250 )

1231 Gain 158.750