Lobster, Inc. incurs the following losses on disposition of business assets during the year: Loss on the abandonment of office equipment | $25,000 | Loss on the sale of a building (straight-line
depreciation taken in prior years of $200,000) | 250,000 | Loss on the sale of delivery trucks | 15,000 |
What is the amount and character of the losses to be reported on Lobster's tax return?
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a. | $40,000 Section 1231 loss only. | |
b. | $40,000 Section 1231 loss, $50,000 long-term capital loss. | |
c. | $290,000 Section 1231 loss. | |
d. | $40,000 Section 1231 loss, $250,000 long-term capital loss. |
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