Albert's Sole Proprietorship Owns the Following Assets

question 4

Multiple Choice

Albert's sole proprietorship owns the following assets. Albert sells his sole proprietorship for $500,000. Calculate Albert's recognized gain or loss and classify it as capital or ordinary.

• A) $230,000 ordinary income.
• B) $230,000 capital gain.
• C) $115,000 ordinary income and $115,000 capital gain.
• D) $110,000 ordinary income and $120,000 capital gain.

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Definitions:

Blaming the Victim

A phenomenon where the victim of a crime or any wrongful act is held entirely or partially responsible for the harm that befell them.

Attitude

A psychological construct representing an individual's degree of like or dislike for an item.

Belief

An acceptance that something exists or is true, especially one without proof.

Fundamental Attribution Error

A cognitive bias that causes people to overemphasize personal characteristics and ignore situational factors in judging others' behavior.