Question: Holly has recognized a $9,000 STCL. She has no other recognized capital gains and losses in 2013. She is considering the sale of a Sec.

Holly has recognized a $9,000 STCL. She has no other recognized capital gains and losses in 2013. She is considering the sale of a Sec. 1231 asset held for four years at a $5,000 gain in 2013. She had not recognized any Sec. 1231 losses during the previous five years and does not expect to have any other Sec. 1231 transactions in 2013. Her marginal tax rate for 2013 is 31%. What is the amount of increase in her 2013 taxes if Holly recognizes the $5,000 Sec. 1231 gain in 2013?

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