Dean Exchanges Business Equipment with a $120,000 Adjusted Basis for $40,000

question 49

Multiple Choice

Dean exchanges business equipment with a $120,000 adjusted basis for $40,000 cash and business equipment with a $140,000 FMV.What is the amount of gain which Dean recognizes on the exchange?

• A)$0
• B)$20,000
• C)$40,000
• D)$60,000

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Definitions:

Data

Information gathered through observation, research, or analysis that can be used for making conclusions or decisions.

Behavioral Confirmation

The self-fulfilling prophecy tendency for a person to become the kind of person others expect him or her to be; also called the expectancy effect.

Expectancy Effect

The tendency for someone to become the kind of person others expect him or her to be; also known as a self-fulfilling prophecy and behavioral confirmation.

Expectancy Effect

The phenomenon where people's expectations or beliefs influence their own or others' behavior, often leading to those expectations being fulfilled.