Dana Purchased an Asset from Her Brother for $15,000

question 125

Multiple Choice

Dana purchased an asset from her brother for $15,000.Her brother's basis was $20,000.If Dana sells the asset to an unrelated party for $12,000,she will recognize

• A)$0.
• B)($1,000)loss.
• C)($3,000)loss.
• D)($4,000)loss.

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Definitions:

Real Property

Land, buildings attached to the land, and items called fixtures, that is, items that are attached to the land or to a building or to another fixture attached to the land.

Personal Property

Tangible, movable goods (chattels) and intangible claims (choses in action).

Chattels

Tangible, movable personal property that can be measured and weighed; also known as goods.

Fixtures

Items that are attached to a property in such a way that they become part of the property and cannot be removed without permission.