12-In year 1, Gardner used funds earmarked for use in Gardner's business to make a personal loan to Carson.In year 3, Carson declared bankruptcy, having paid off only $500 of the loan at that time.In year 1, Gardner purchased equipment for use in Gardner's business.In year 3, Gardner sold the equipment at a $5,000 loss.In January, year 3, Gardner received shares of stock as a gift from Smith; the shares had been purchased by Smith in year 1.In November, year 3, Gardner sold the property for a $5,000 gain.

Which of the above transactions will Gardner report as long-term capital gains or losses for year 3?

A.

Both the sale of equipment and the sale of shares.

B.

The sale of equipment

C.

Write-off of uncollectible personal loan

D.

The sale of shares

13-A corporation sold section 1250 property at a gain, which is considered a corporate preference item.As a result, a larger portion of the gain is considered ordinary income than if similar property had been sold by a noncorporate taxpayer.Which code section, subsection, and paragraph describes how to determine the additional portion of the gain that will be treated as ordinary income?

Enter your response in the answer fields below.Guidance on correctly structuring your response appears above and below the answer fields.

IRC

()

()

Examples of correctly formatted IRC-2 responses are IRC-21(a)(1), IRC56(a)(1), IRC25A(a)(1), IRC162(a)(1), IRC263A(a)(1), IRC1245(a)(1), IRC2032A(a)(1) and IRC1400Z-1(a)(1).