Noelle Owns an Automobile Which She Uses for Personal Use

question 36

Multiple Choice

Noelle owns an automobile which she uses for personal use. Her adjusted basis is $45,000 (i.e., the original cost) . The car is worth $22,000. Which of the following statements is correct?

• A) If Noelle sells the car for $22,000, her realized loss of $23,000 is not recognized.
• B) If Noelle exchanges the car for another car worth $22,000, her realized loss of $23,000 is not recognized.
• C) If the car is stolen and it is uninsured, Noelle may be able to recognize part of her realized loss of $23,000.
• D) Only a. and b. are correct.
• E) a., b., and c. are correct.

---

Definitions:

Cut-Out Pressure

The set pressure at which a pressure switch deactivates or cuts out, stopping the system or process it controls.

Air System

The network within a vehicle or machine that manages the distribution and flow of air, important for various functions including braking and engine operation.

Adjustment

The process or action of altering or modifying something to achieve a desired fit, function, or accuracy.

FMVSS-121

Federal Motor Vehicle Safety Standard No. 121, a regulation that sets the standard for air brake systems in heavy vehicles, ensuring safety through specified design, performance, and maintenance requirements.