Liam Used His Auto 70 Percent for Business and 30

question 24

Multiple Choice

Liam used his auto 70 percent for business and 30 percent for personal use.He purchased it for $15,000 and has taken $5,460 of depreciation on it.What is his recognized gain on a sale for $12,000 and what is its character?

• A)$2,940 Section 1231 gain
• B)$3,360 Section 1245 ordinary income
• C)$5,460 Section 1245 ordinary income
• D)$6,540 Section 1231 gain

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Definitions:

Terms of Trade

This concept measures the ratio of a country's export prices to its import prices, indicating the relative strength of its economy in the global market.

Equilibrium World Price

The price of an internationally traded product that equates the quantity of the product demanded by importers with the quantity of the product supplied by exporters; the price determined at the intersection of the export supply curve and the import demand curve.

Exports Supplied

Goods or services provided by one country to another in exchange for payment or trade.

Imports Demanded

The total quantity of goods and services that consumers in a country wish to purchase from abroad at a given price level.