Ebon Company Had an Involuntary Conversion on December 23,2011

question 8

Multiple Choice

Ebon Company had an involuntary conversion on December 23,2011.The machinery had been acquired on April 1,2009,for $69,000 and its adjusted basis was $14,200.The machinery was completely destroyed by fire and Ebon received $10,000 of insurance proceeds for the machine and did not replace it.This was Ebon's only casualty or theft event for the year.As a result of this event,Ebon initially has:

• A) $10,000 § 1231 loss.
• B) $10,000 § 1245 recapture gain.
• C) $4,200 casualty loss.
• D) $4,200 § 1231 loss.
• E) None of the above.

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Definitions:

Second Gilded Age

Refers to a period characterized by significant economic growth, wealth concentration, and political influence of businesses, drawing parallels with the original Gilded Age of the late 19th century.

ERA

Stands for Equal Rights Amendment, a proposed amendment to the United States Constitution aimed at guaranteeing equal legal rights for all American citizens regardless of sex.

Equal Rights Amendment

A proposed amendment to the U.S. Constitution aimed at guaranteeing equal legal rights for all American citizens regardless of sex.

Stagflation

An economic situation characterized by stagnant economic growth, high unemployment, and high inflation.