Rita Died on January 1,2014 Owning an Asset with a FMV

question 95

Multiple Choice

Rita died on January 1,2014 owning an asset with a FMV of $730,000 that she purchased in 2010 for $600,000.Bert inherited the asset from Rita.When Bert sells the asset for $800,000 on August 20 of this year,he must recognize a

• A)STCG of $70,000.
• B)LTCG of $70,000.
• C)STCG of $200,000.
• D)LTCG of $200,000.

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Definitions:

Reporting Period

A specified duration of time for which an organization prepares its financial statements and reports to present its financial performance and position.

Tax Adjustments

Modifications made to financial statements to account for differences between accounting practices and tax regulations.

Bonus Shares

Shares issued to current shareholders at no cost, based on the number of shares that a shareholder owns.

Cash Dividend

A payment of profits by a company to its shareholders, made in cash, as opposed to stock or other forms of payment.