Which One of the Following Losses May Be Recognized

question 12

Multiple Choice

Which one of the following losses may be recognized?

• A)Decline in the value of P's computer before he converted it from personal to exclusively business use
• B)Sale of property by M to his son for an amount less than either M's basis in the property or its fair market value at the time of sale
• C)$2,000 by K, if L's adjusted basis in jewelry was $35,000, its fair market value in 2008 was $30,000 when she gave it to her friend K, and K held it for investment and sold it this year for $28,000
• D)$7,000 by K, if L's adjusted basis in jewelry was $35,000, its fair market value in 2008 was $30,000 when she gave it to her friend K, and K held it for investment and sold it this year for $28,000

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Definitions:

Agent's Act

Refers to actions taken by an agent on behalf of a principal, where the agent has the authority to affect the principal's legal position.

Principal's Conduct

Actions or behaviors of a principal (party who has authorized an agent to act on their behalf) that can affect the principal's legal rights and liabilities.

Express Ratification

The explicit approval or confirmation of an act or contract by all parties involved, often necessary for the act's validity.

Manifests Assent

The demonstration of agreement to the terms of a contract, often through an overt action or explicit consent.