The following gains and losses pertain to Arnold's business assets that qualify as Sec. 1231 property. Arnold does not have any nonrecaptured net Sec. 1231 losses from previous years, and the portion of gain recaptured as ordinary income due to the depreciation recapture provisions has been eliminated.

Loss from hurricane damage $25,000

Loss due to condemnation $20,000

Gain due to the sale of Sec. 1231 property $16,000