In Its Current Tax Year, PRS Corporation Generated $300,000 Ordinary

question 97

Multiple Choice

In its current tax year, PRS Corporation generated $300,000 ordinary income from the performance of consulting services for its clients. PRS sold two assets, recognizing a $20,000 gain on the first sale and a $31,000 loss on the second sale. Which of the following statements is false?

• A) If the gain and loss were capital gain and loss, PRS's taxable income was $300,000.
• B) If the gain was capital gain and the loss was ordinary, PRS's taxable income was $269,000.
• C) If the gain and loss were ordinary, PRS's taxable income was $289,000.
• D) If the gain was ordinary and the loss was a capital loss, PRS's taxable income was $320,000.

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Definitions:

Chicago Board Of Trade

A leading platform for the trading of futures and options related to agricultural commodities, financial products, and other assets.

Futures Exchanges

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Interest Rate Swaps

Financial derivatives contracts in which two parties exchange interest rate payments, typically one fixed rate for one floating rate, on a specific nominal amount.

Interest Rate Volatility

The extent to which interest rates fluctuate over a particular period of time.