Dinah Owned Land with a FMV of $130,000 (Adjusted Basis

question 83

Multiple Choice

Dinah owned land with a FMV of $130,000 (adjusted basis $120,000) which is investment property (a capital asset) .Dinah owned a second tract of land,a 1231 asset,with a FMV of $46,000 (adjusted basis $50,000) .Both tracts were acquired in 2001 and condemned by the state this year.The state paid an amount equal to FMV.If there are no other transactions involving capital assets or 1231 assets,Dinah must report on her current year return

• A)$6,000 net ordinary income.
• B)$6,000 net section 1231 gain treated as a net capital gain.
• C)a LTCG of $10,000 and a 1231 loss of $4,000.
• D)a LTCG of $10,000 and a nondeductible loss of $4,000.

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Definitions:

Endocrine

Relating to glands that secrete hormones directly into the bloodstream, influencing various bodily functions.

Exocrine

Pertains to glands that release their secretions through ducts onto an epithelial surface, such as sweat glands.

Goblet Cells

Specialized epithelial cells that secrete mucus to lubricate and protect the mucous membranes of the intestines and respiratory tract.

Serous Fluid

Fluid similar to lymph that is produced by and covers serous membrane; it lubricates the serous membrane.