Sandra Sells a Business-Use Warehouse to Her Wholly Owned Corporation

question 33

Multiple Choice

Sandra sells a business-use warehouse to her wholly owned corporation. Sandra realizes a loss of $13,000 on the sale. (Sales price, $102,000, less adjusted basis, $115,000) . Tax law does not permit Sandra a deduction for the $13,000 loss. Which of the following explain(s) this tax result?
I.Arm's-length Transaction Concept.
II.Pay-As-You-Go Concept.
III.Legislative Grace Concept
IV.Business Purpose Concept.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Statements III and IV are correct.
• D)Statements I and III are correct.
• E)Statements I, II, III, and IV are correct.

---

Definitions:

Closely Related

Describes entities that share a significant degree of similarity or common attributes, often used in the context of familial, genetic, or thematic connections.

Green

The color associated with wavelengths of light perceived by the human eye, often symbolizing growth, nature, and fertility.

Sexual Exchange

The process of genetic material exchange during sexual reproduction, leading to genetic diversity in offspring.

Spirogyra

A filamentous green algae characterized by its spiral chloroplast arrangements, commonly found in freshwater environments.