If You Purchased Shares of Common Stock in 1990 for $1,000

question 133

Multiple Choice

If you purchased shares of common stock in 1990 for $1,000 and sold them for $2,000 in 2001 you would be liable for taxes on

• A)$2,000.
• B)$1,000 less the rate of inflation.
• C)$1,000.
• D)$2,000 less the rate of inflation.

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Definitions:

Statement of Financial Position

A financial statement that shows the assets, liabilities, and equity of an entity at a specific point in time.

Statement of Income

A financial report that shows the company's revenue, expenses, and net profit or loss over a specific period.

Leasehold Improvements

Enhancements made to a leased property by the lessee, leading to increased property value.

Useful Life

The estimated period over which a fixed asset is expected to be usable by the entity, affecting its depreciation calculation.