Bourne Guitars, a corporation, reported a $157,000 net §1231 gain for year 6.
a. Assuming Bourne reported $50,000 of nonrecaptured §1231 losses during years 1-5, what amount of Bourne's net §1231 gain for year 6, if any, is treated as ordinary income?
b. Assuming Bourne's nonrecaptured §1231 losses from years 1-5 were $200,000, what amount of Bourne's net §1231 gain for year 6, if any, is treated as ordinary income?