Alpha Sold Machinery That It Used in Its Business to Beta

question 120

Multiple Choice

Alpha sold machinery that it used in its business to Beta, a related entity, for $39,500. Beta used the machinery in its business. Alpha bought the machinery a few years ago for $50,500 and has claimed $29,500 of depreciation expense. What is the amount and character of Alpha's gain?

• A)$18,500 ordinary income under §1239.
• B)$10,000 ordinary gain and $8,500 §1231 gain.
• C)$18,500 §1231 gain.
• D)$18,500 capital gain.
• E)None of the choices are correct.

Understand the concept of acceptance in contract law, including the necessity of assent by the offeree to the proposal by the offeror.

Recognize the specifics and exceptions related to methods and timing of acceptance under different legal standards.

Distinguish between bilateral and unilateral contracts in terms of offer acceptance requirements.

Identify legal standings on whether silence or actions unrelated to the offer can signify acceptance.

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Definitions:

Horizontal Merger

A merger between two companies operating in the same industry, often aiming to create synergies, expand market share, or reduce competition.

Product Extension Merger

A strategic action where companies merge to add new product lines or services, enhancing their market reach or diversity.

Conglomerate Merger

A conglomerate merger is the combination of two or more companies operating in entirely different industries into a single corporate structure.

Antitrust Laws

Legislation designed to promote fair competition for the benefit of consumers by regulating anti-competitive practices.