Two Months Ago, Dawes Inc

question 81

Multiple Choice

Two months ago, Dawes Inc. broke a multi-year lease on office space that it had occupied for four years. Three years ago, Dawes paid $85,300 to install carpeting and new electrical fixtures throughout the office. Accumulated depreciation through the date that Dawes vacated the office was $51,000. What is the tax consequence of Dawes' abandonment of the carpeting and fixtures?

• A) Dawes has no tax consequence because it did not sell or exchange these assets.
• B) $34,300 capital loss.
• C) $34,300 ordinary loss.
• D) $34,300 Section 1231 loss.

---

Definitions:

Desktop

The primary user interface screen in many computer operating systems, where icons, windows, and other graphical elements can be displayed and interacted with.

Properties Dialog Box

A user interface element in software applications that displays the attributes or settings of a file, resource, or application for viewing or editing.

Hard Drive

A non-volatile storage device used to store and retrieve digital information using rapidly rotating disks coated with magnetic material.

File Icons

Graphic symbols used to represent files or documents on a computer's user interface, indicating the file type or content.