Henrietta and Hollis Have Been Married for 10 Years When

question 94

Multiple Choice

Henrietta and Hollis have been married for 10 years when Hollis dies in a sky-diving accident.Their assets are summarized below. Henrietta and Hollis reside in Wisconsin,a community property state.All of the assets were acquired with community funds and pass to Henrietta.Her basis for each of the assets becomes:
Car House Cash from life insurance proceeds

• A) $20,000 $150,000 $ 10,000
• B) $17,500 $175,000 $ 10,000
• C) $17,500 $175,000 $100,000
• D) $15,000 $200,000 $100,000
• E) None of the above.

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Definitions:

Impairment Loss

A charge applied to a company's income statement when the fair value of an asset drops below its carrying value on the balance sheet.

Carrying Value

The recorded book value of an asset in a company's financial statements, calculated as the original cost minus accumulated depreciation or amortization.

Recoverable Amount

The estimated amount that can be recovered from an asset's sale or use, typically higher than its net book value.

Canadian GAAP

Generally Accepted Accounting Principles in Canada, a set of standards for financial reporting and accounting.