Emma Owns a Small Building ($120,000 Basis and $123,000 FMV)and

question 67

Multiple Choice

Emma owns a small building ($120,000 basis and $123,000 FMV) and equipment ($35,000 adjusted basis and $22,000 FMV) .Both assets were acquired three years ago and are used in Emma's business.Both are destroyed by fire.Insurance proceeds were equal to their FMVs.Only one other transfer of an asset occurs during the year,and a $3,000 LTCL is recognized.After considering all transactions,the tax result to Emma is a

• A)$13,000 NLTCL.
• B)$13,000 ordinary loss.
• C)$3,000 LTCG; $3,000 LTCL; and $13,000 ordinary loss.
• D)$10,000 net ordinary loss and a $3,000 NLTCL.

---

Definitions:

Anal Stage

The second stage in Freud's theory of psychosexual development, focusing on control issues and toilet training during toddlerhood.

Oral Stage

The initial phase in Freud's psychosexual development theory where an infant's pleasure centers are focused on the mouth, leading to behaviors such as sucking and biting.

Electra Complex

A term in psychoanalytic theory referring to a girl's psychosexual competition with her mother for possession of her father.

Freud

Sigmund Freud, an Austrian neurologist, established psychoanalysis, a method of treating mental disorders through conversations between a patient and a psychoanalyst.