Tyrone Sells His Personal-Use Car That Had Cost $15,000 for $10,000

question 55

Multiple Choice

Tyrone sells his personal-use car that had cost $15,000 for $10,000. Why is the loss realized on this transaction disallowed as a deduction?
I.Legislative Grace is lacking.
II.Personal losses are disallowed.
III.Business purpose is lacking.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Only statement III is correct.
• D)Statements I and II are correct.
• E)Statements I, II, and III are correct.

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Definitions:

Pure Monopoly

A market structure where a single seller controls the entire market for a product or service, with no close substitutes available.

Close Substitutes

Products or services that can easily replace each other in the eyes of the consumer, resulting in a high degree of interchangeability and competition.

Single Firm

A business or company that operates alone in its industry without competitors.

Purely Monopolistic

Characterizes a market scenario where one entity exclusively controls the entire market for a product or service, eliminating all direct competition.