What is the gain amount for Lindsey when she sold the necklace?

The correct gain amount for Lindsey from the sale of her necklace is classified as a long-term capital gain. This determination is based on the nature of the asset being sold and the holding period prior to the sale. When individuals sell personal property like jewelry that has been held for more than one year, any profit from the sale is typically treated as a long-term capital gain.

In this scenario, if Lindsey sold the necklace for $1,100, and her basis in the necklace—typically its fair market value at the time of inheritance—was below that amount, the difference represents a gain. Given that the sale resulted in a $1,100 profit, this gain will be categorized as a long-term capital gain if she inherited the necklace and kept it for over a year before selling.

This classification is important due to the favorable tax treatment long-term capital gains receive compared to ordinary income or short-term capital gains, which are taxed at higher rates. Therefore, the nature of Lindsey’s profit reflects the correct answer.