Cassie Owns Equipment ($45,000 Basis and $30,000 FMV)and a Building

question 13

Multiple Choice

Cassie owns equipment ($45,000 basis and $30,000 FMV) and a building ($152,000 basis and $158,000 FMV) ,which are used in Cassie's business.Both assets were acquired two years ago.The equipment and the building are destroyed in a fire,and Cassie collects insurance proceeds equal to the assets' FMV.The tax result to Cassie for this transaction is a

• A)$15,000 Sec.1231 loss and a $6,000 ordinary gain.
• B)$15,000 ordinary loss and a $6,000 ordinary gain.
• C)$15,000 ordinary loss and a $6,000 Sec.1231 gain.
• D)$15,000 Sec.1231 loss and a $6,000 Sec.1231 gain.

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Definitions:

Western Culture

A term referring to the social norms, beliefs, values, and practices originating from or associated with the Western part of the world, particularly Europe and the Americas.

Low-power Positions

Situations or roles where an individual or group possesses limited influence, authority, or resources, affecting their ability to assert needs or make decisions.

Executor

An individual appointed to execute, or carry out, the instructions of a will.

Estate

Legal term referring to the assets and liabilities of a deceased person, or, more broadly, the collective assets and resources owned by an individual.