On March 3,2014,Craig Bought a Business-Use Vehicle for $20,000

question 116

Multiple Choice

On March 3,2014,Craig bought a business-use vehicle for $20,000.He used the vehicle for three years and properly deducted a total of $12,000 as depreciation expense during this period.At the end of 2017,Craig sells the vehicle for $7,500.Why is Craig's deductible loss $500?
I.Craig has already recovered $12,000 of his investment through the depreciation deduction.
II.The adjusted basis of the vehicle was $12,000 at the date of sale.
III.$7,500 of the adjusted basis was recovered because of the sale.
IV.The realized loss is recognized because it was incurred with business-use property.
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• A)Statements I and III are correct.
• B)Statements I,III and IV are correct.
• C)Statements II and III are correct.
• D)Only statement IV is correct.
• E)Statements I,II,III,and IV are correct.

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Definitions:

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The organization or categorization of products into groups or categories based on similarities, purpose, or type, often seen in retail or online stores.

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