The Following Assets in Jack's Business Were Sold in 2017

question 101

Multiple Choice

The following assets in Jack's business were sold in 2017: $\begin{array}{lll}\text { Asset } & \text { Holding Period } & \text { Gain/(Loss) } \\\text { Office Equipment } & 6 \text { years } & \$ 1,100 \\\text { Automobile } & 8 \text { months } & (\$ 800) \\\text { ABC Stock (capital asset) } & 2 \text { years } & \$ 1,400\end{array}$ ? The office equipment had a zero adjusted basis and was purchased for $8,000.The automobile was purchased for $2,000 and sold for $1,200.The ABC stock was purchased for $1,800 and sold for $3,200.In 2017 (the year of sale) , Jack should report what amount of net capital gain and net ordinary income?

• A)$1,700 LTCG.
• B)$600 LTCG and $300 ordinary gain.
• C)$1,400 LTCG and $300 ordinary gain.
• D)$2,500 LTCG and $800 ordinary loss.
• E)None of the above.

---

Definitions:

Encode

The process of converting information into a particular form for efficient communication, storage, or encryption.

Process

A series of actions or steps taken in order to achieve a particular end.

Retrieve Information

The act of recalling or retrieving previously learned or stored information from memory.

Neuroscience Perspective

An approach in psychology that emphasizes the study of how the brain and the nervous system determine behavior and mental processes.