Carlota Sells Her Personal Automobile for $1,000

question 37

Multiple Choice

Carlota sells her personal automobile for $1,000. The car cost her $10,000 nine years ago. What are the tax effects of the current sale?
I.Carlota realizes a transaction loss of $9,000 due to the capital recovery concept.
II.Carlota realizes income of $1,000 due to the all-inclusive-income concept.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Earn Money

The act of receiving financial compensation in exchange for goods provided, services rendered, or through employment.

Stimulating Activities

Tasks or engagements that provoke thought, interest, or excitement, contributing to mental or physical growth.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

Trivialized

Made to appear less important, significant, or complex than it actually is.