Lourdes,a Sole Proprietor,collected $8,650 on November 21,2014 on Some of Her

question 34

Multiple Choice

Lourdes,a sole proprietor,collected $8,650 on November 21,2014 on some of her outstanding receivables.Her basis in these receivables was $0.What is the gain or loss Lourdes recognizes for 2014?

• A) no gain or loss as the payments are within the normal course of business.
• B) a short-term gain as the payments are from receivables that are always considered short-term.
• C) a short-term loss as the FMV is greater than the payments received on the receivables.
• D) an ordinary gain because the receivables had a FMV greater than the basis of the receivables.

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