Emma Owns a Small Building ($120,000 Basis and $123,000 FMV)and

question 24

Multiple Choice

Emma owns a small building ($120,000 basis and $123,000 FMV) and equipment ($35,000 basis and $22,000 FMV) .Both assets were acquired three years ago,are used in Emma's business,and are depreciated using straight-line depreciation.Both are destroyed by fire.Insurance proceeds were equal to their FMVs.Only one other transfer of an asset occurs during the year,and a $3,000 LTCL is recognized.After considering all transactions,the tax result to Emma is a

• A)$13,000 NLTCL.
• B)$13,000 ordinary loss.
• C)$3,000 LTCG; $3,000 LTCL; and $13,000 ordinary loss.
• D)$10,000 net ordinary loss and a $3,000 NLTCL.

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Definitions:

Repressor Molecule

A protein that inhibits gene expression by binding to the operator or associated silencers.

Operator

In genetics, a segment of DNA to which a repressor protein binds, controlling the transcription of nearby genes.

RNA Polymerase

During transcription, an enzyme that creates an mRNA transcript by joining nucleotides complementary to a DNA template.

Translation Site

The location within the cell where mRNA is translated into proteins, typically occurring in the ribosomes.