A Taxpayer Sells a Patent on a New Algorithm for a Gain.Which

question 3

Multiple Choice

A taxpayer sells a patent on a new algorithm for a gain.Which taxpayer will be allowed capital gain treatment for the sale? Assume that the patent had not been placed in service as of the acquisition date.

• A)a sole proprietor who purchased the patent from the inventor
• B)a corporation who purchased the patent from the inventor
• C)both of the above
• D)none of the above

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Definitions:

Aggregate

A total sum or amount made up of distinct components, often used in economics to refer to total output or income.

Equilibrium

An equilibrium where demand meets supply in the marketplace, stabilizing prices as a consequence.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a given period.

Equilibrium Wage Rate

The wage rate at which the supply of labor is equal to the demand for labor in the labor market.