The Following Assets in Jack's Business Were Sold in 2016

question 47

Multiple Choice

The following assets in Jack's business were sold in 2016:
Asset
Holding Period
Gain/(Loss)
Office Equipment
6 years
$1,100
Automobile
8 months
($ 800)
ABC Stock (capital asset)
2 years
$1,400
​
The office equipment had a zero adjusted basis and was purchased for $8,000.The automobile was purchased for $2,000 and sold for $1,200.The ABC stock was purchased for $1,800 and sold for $3,200.In 2016 (the year of sale) ,Jack should report what amount of net capital gain and net ordinary income?

• A)$1,700 LTCG.
• B)$600 LTCG and $300 ordinary gain.
• C)$1,400 LTCG and $300 ordinary gain.
• D)$2,500 LTCG and $800 ordinary loss.
• E)None of the above.

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Definitions:

Sophisticated

A term describing something complex, refined, or developed in a high degree of detail.

Biased Results

Outcomes of analyses or experiments that are skewed due to flawed methodology, prejudice, or any factor that deviates from objectivity.

Search Engines

Web-based tools that index and search databases of internet resources, allowing users to find information online by typing keywords or queries.

Secondhand

Items that have been previously owned and used by someone else before being sold or given to another person.