Luce Company Exchanged the Copyright on a Software Application for a Copyright

question 51

Multiple Choice

Luce Company exchanged the copyright on a software application for a copyright on a different software application. Luce's gain on the exchange was nontaxable (because the copyrights were like-kind) but was included in financial statement income. Which of the following statements is false?

• A) Luce's book basis in the copyright received is the copyright's cost (FMV).
• B) Luce's tax basis in the copyright received equals its tax basis in the copyright surrendered.
• C) Luce's future amortization deductions with respect to its tax basis in the copyright will be different from future amortization expense for financial statement purposes.
• D) None of these statements is false.

---

Definitions:

Bruce Western

A sociologist known for his research on the American criminal justice system, poverty, and inequality.

Secondary Deviance

Deviant behavior that occurs when an individual accepts the label of deviant and acts accordingly, often as a result of societal reactions.

Differential Association Theory

A sociological theory that suggests individuals learn deviant behavior from those close to them who provide models of and opportunities for deviance.

Deviant Cultures

Groups or societies that adopt behaviors and norms that significantly differ from or challenge those of the mainstream society.