For 20X6, Brandon Manufacturing has a net Section 1231 gain of $28,000. Brandon reported the net Section 1231 gains or (losses) for the previous five years shown below. None of the losses ever caused a net Section 1231 gain in any year before 20X1 to be treated as an ordinary gain.
20X1 - ($14,000)
20X2 - (7,000)
20X3 - 9,000
20X4 - 6,000
20X5 - (2,000)
How much of the $28,000 Section 1231 gain realized in 20X6 is treated as ordinary income? How much is treated as a long-term capital gain?