Elise Sells a Painting That Has a Fair Market Value

question 94

Multiple Choice

Elise sells a painting that has a fair market value of $9,000 to Jon for $6,000. Which of the following statements about the tax effect of the sale is/are correct?
I.If Jon is an employee of Elise's, no income is recognized from the sale.
II.If Jon is Elise's brother, Jon does not recognize any income from the sale.
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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:

Fair Die

A die that is perfectly balanced, ensuring that each of its faces has an equal likelihood of landing up when thrown.

Probability

A rephrased definition: A statistical metric that quantifies the chance that a specific event or outcome will happen.

Likely Viewer

A term used to describe someone who is considered a probable audience member for a particular television show, movie, or event based on certain criteria.

Unlikely Viewer

A person or demographic that is not expected to be interested in viewing certain content or media.