A Loss on the Sale of an Asset That Is

question 115

Multiple Choice

A loss on the sale of an asset that is depreciable and used in business is ________; a loss on the sale of a non-depreciable asset is ________.

• A) deductible from capital gains income; deductible from ordinary income
• B) deductible from ordinary income; deductible only against capital gains
• C) a credit against the tax liability; not deductible
• D) not deductible; deductible only against capital gains

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Definitions:

Cyclical Unemployment

This type of unemployment fluctuates with the business cycle, increasing during economic downturns and decreasing during periods of economic growth.

Frictional Unemployment

Short-term unemployment that arises from the process of matching workers with jobs and occurs even in healthy economies.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product much more efficiently than with individual craftsmanship.

Cyclically Unemployed

Individuals who are unemployed due to the downturn in the business cycle, such as during a recession.