Sec. 1231 Cains and Losses. Edith, who has no other sales or
exchanges and no nonrecaptured Sec. 1231 losses, sells three tracts of land
that are used in her trade or business. Edith
is single, and her taxab le income is $120,000 without
considering the following sales.
Asset #1- $15,000 gain and holding period of 20 months
Asset #2- $17,000 loss and holding period of 25 months
Asset #3- $ 5,000 gain and holding period of 13 months
a. What is the increase in her taxes as a result of the
three sales?
b. If the holding period for Asset #2 is nine months, what
is the decrease in her taxes as a
result of the three sales?
c. Same as part a except her taxable income is $500,000.
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