The Following Assets in Jack's Business Were Sold in 2012

question 1

Multiple Choice

The following assets in Jack's business were sold in 2012: The office equipment had a zero adjusted basis and was purchased for $8,000.The automobile was purchased for $2,000 and sold for $1,200.The ABC stock was purchased for $1,800 and sold for $3,200.In 2012 (the year of sale) ,Jack should report what amount of net capital gain and net ordinary income?

• A) $1,700 LTCG.
• B) $600 LTCG and $300 ordinary gain.
• C) $1,400 LTCG and $300 ordinary gain.
• D) $2,500 LTCG and $800 ordinary loss.
• E) None of the above.

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Definitions:

Defence Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety and to cope with reality or maintain self-image.

Identification

The process of associating oneself closely with other individuals or groups, often by adopting their characteristics or views.

Self-esteem

An individual's subjective evaluation of their own worth or value.

Alliance

A union or association formed for mutual benefit, especially between countries or organizations.