Jan Purchased an Antique Desk at Auction

question 58

Multiple Choice

Jan purchased an antique desk at auction.For two years,the desk sat in Jan's garage until she decided to restore it.This year,while cleaning and restoring the desk,Jan discovered $1,500 in a hidden compartment inside one drawer.With respect to the $1,500,Jan must

• A)report nothing.
• B)amend her previous tax return and report the $1,500.
• C)report only $750 due to the statute of limitations.
• D)report $1,500 on this year's tax return.

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Definitions:

Deadweight Loss

A loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Average Cost Price

The average cost price is the total cost of production divided by the number of units produced, showing the average expense for each unit.

Profit or Loss

The financial outcome of an enterprise's operations, where profit results from revenues exceeding expenses and loss occurs when expenses surpass revenues.

Perfect Price Discrimination

A pricing strategy where a seller charges the maximum possible price for each unit consumed, extracting the maximum consumer surplus.