Ethan, a Sole Proprietor, Sold the Following Assets in 2018

Multiple Choice

Ethan, a sole proprietor, sold the following assets in 2018: The equipment was purchased several years ago but the XYZ stock was purchased as an investment on 3/9/18 and was sold on 11/15/18. Ethan is in the 32% marginal tax bracket for 2018. At the beginning of 2018, he had $2,000 of unrecaptured Section 1231 losses from 2 years ago. How much additional tax will Ethan pay as a result of these transactions?

A) $1,200
B) $1,650
C) $2,390
D) $2,640