Problem
This year Pranav had the gains and losses noted below on property, plant and equipment used in his business. Each asset had been held longer than one year.
|
Gain due to insurance reimbursement for fire
|
?$17,000
|
|
Loss due to condemnation
|
?(12,000)
|
|
Gain on sale of Sec. 1231 property
|
?21,000
|
A review of Pranav's reporting of Sec. 1231 transactions for the prior five years indicates a net Sec. 1231 loss of $14,000 three years ago and a net Sec. 1231 gain of $8,000 last year (before the five-year lookback). Pranav will recognize.