Abby Sold Her Unincorporated Business That Consisted of Equipment and Goodwill.The

question 8

Multiple Choice

Abby sold her unincorporated business that consisted of equipment and goodwill.The equipment had an original cost of $200,000 and Abby had claimed $120,000 in depreciation (adjusted basis = $80,000) .Abby had no basis in the goodwill.The sales price for the business was $250,000 with $150,000 for the equipment and $100,000 for the goodwill.The buyer agreed to pay $120,000 on June 30, 2019, and $130,000 (plus interest at the Federal rate) in two years.Abby's gain to be reported in 2019 (exclusive of interest) is:

• A)$40,000.
• B)$51,000.
• C)$102,000.
• D)$118,000.
• E)$170,000.

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Definitions:

Hyperactivity

A condition characterized by abnormally increased activity levels and movements, often with an inability to maintain focus or calmness.

Autism

A developmental disorder characterized by difficulties with social interaction and communication, and by restricted or repetitive patterns of thought and behavior.

Chromosomes

are long strands of DNA and proteins found in the nucleus of cells, carrying genetic information.

Genes

Units of heredity made up of DNA that encode the instructions for the development, functioning, and reproduction of all known organisms.