Classify the Gain or Loss on Each of George's Assets

question 120

Multiple Choice

Classify the gain or loss on each of George's assets listed below using the following codes. Note: a code may be used once, more than once, or not at all.
-George's construction company completed 5 homes during February 2012.He sells one of the homes in March 2013 at a $37,000 gain.

• A)Long-term capital
• B)Short-term capital
• C)Collectible gain
• D)Section 1231
• E)Section 1245
• F)Section 1250
• G)Ordinary income/loss
• H)Nontaxable/nondeductible

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Definitions:

Money Income

The total amount of monetary earnings or revenue received by an individual or entity, usually measured within a specific period.

Slope

The measure of the steepness or incline of a line, indicating the rate at which y values change with respect to x values.

Budget Line

A chart that displays every possible mix of two commodities that could be bought, given a particular financial plan, with unchanging prices.

Price Ratio

The ratio expressing the relative prices of two goods or services, indicating how much of one is needed to trade for one unit of the other.