Hugo Inc,A Calendar Year Taxpayer,sold Two Operating Assets This Year

Multiple Choice

Hugo Inc.,a calendar year taxpayer,sold two operating assets this year.The first sale generated a $38,700 Section 1231 gain,and the second sale generated a $59,400 Section 1231 loss.As a result of these sales,Hugo should recognize:

A) $20,700 ordinary loss
B) $38,700 Section 1231 gain treated as capital gain and $59,400 ordinary loss
C) $20,700 capital loss
D) None of the above