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.

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