1 answer

Required information (The following information applies to the questions displayed below.) Bourne Guitars, a corporation, reported...

Question:

Required information (The following information applies to the questions displayed below.) Bourne Guitars, a corporation, rep

Required information (The following information applies to the questions displayed below.) Bourne Guitars, a corporation, reported a $157,000 net $1231 gain for year 6. a. Assuming Bourne reported $50,000 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? Bourne's gain treated as ordinary income

Answers

Answer

A)

Bourne's gain treated as ordinary income is same as reported non recaptured . $50,000

Note/ Explanation:

$1,231 gain to the extent of nonrecaptured $1,231 losses during past five years is treated as ordinary income.

Therefor , ordinary income is $50,000
.

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