Which of the Following Statements Is Correct

question 66

Multiple Choice

Which of the following statements is correct?

• A) When depreciable property is gifted to another individual taxpayer, the depreciation recapture potential is extinguished.
• B) When depreciable property is inherited by a taxpayer, the depreciation recapture potential is extinguished.
• C) When corporate depreciable property is distributed as a dividend, the depreciation recapture potential is generally not recognized.
• D) When depreciable property is contributed to charity, the depreciation recapture potential has no effect on the amount of the charitable contribution deduction.
• E) All of the above are correct.

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Definitions:

Penal

Pertaining to punishment or penalties imposed for violations of laws or regulations.

Liquidated Damages

Predetermined sum agreed upon by the parties involved in a contract to be paid as compensation in case of breach, representing an estimate of actual damages that might result from non-performance.

Unconscionable

Refers to an action or decision that is shockingly unfair or unjust, often used in legal contexts to describe contracts or practices.

Express Warranty

A clear and definitive promise or guarantee made by a seller regarding the quality or functionality of a product.