Classify the Gain or Loss on Each of George's Assets

question 116

Multiple Choice

Classify the gain or loss on each of George's assets listed below using the following codes.Note: a code may be used once,more than once,or not at all.
-After using a house as his personal home for 20 years,George converts it in 2006 to an office building for use in his construction business.He sells the building at a $65,000 loss in 2017.

• A)Long-term capital
• B)Short-term capital
• C)Collectible gain
• D)Section 1231
• E)Section 1245
• F)Section 1250
• G)Ordinary income/loss
• H)Nontaxable/nondeductible

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Definitions:

Machine-Hours

A measure of production time, quantifying the number of hours machines are operating in the manufacturing process.

Time-Driven

A concept or approach where activities, costs, or operations are measured and managed based on time, often used in activity-based costing.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or projects based on their consumption of resources.

Unused Capacity

The portion of a company's production capability or resources that is not currently being used in production.