Webster, Who Owns All the Bear Corporation Stock, Purchases a Dump

question 75

Multiple Choice

Webster, who owns all the Bear Corporation stock, purchases a dump truck from Bear Corporation in January. The truck cost $12,000 and has a $10,000 adjusted basis at the time of the sale. Webster pays Bear the truck's $8,000 FMV. Later in the same year, Webster sells the dump truck to an unrelated party for $6,000. Webster can recognize a loss of

• A)$4,000.
• B)$2,000.
• C)$3,000.
• D)$5,000.

---

Definitions:

Economy

Economy encompasses the system by which goods and services are produced, distributed, and consumed within a society, influenced by governmental, cultural, and environmental factors.

Goods and Services

The tangible products (goods) and intangible items (services) that are produced and provided to meet the needs and wants of consumers.

Market Economy

An economic system in which supply and demand drive the production and distribution of goods and services, with minimal government intervention.

Specialization

Focus on a narrow area of expertise or production to increase efficiency and output.