On March 3, 2015, Craig Bought a Business-Use Vehicle for $20,000

question 1

Multiple Choice

On March 3, 2015, Craig bought a business-use vehicle for $20,000. He used the vehicle for three years and properly deducted a total of $12,000 as depreciation expense during this period. At the end of 2018, Craig sells the vehicle for $7,500. Why is Craig's deductible loss $500?
I.Craig has already recovered $12,000 of his investment through the depreciation deduction.
II.The adjusted basis of the vehicle was $12,000 at the date of sale.
III.$7,500 of the adjusted basis was recovered because of the sale.
IV.The realized loss is recognized because it was incurred with business-use property.
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• A)Statements I and III are correct.
• B)Statements I, III and IV are correct.
• C)Statements II and III are correct.
• D)Only statement IV is correct.
• E)Statements I, II, III, and IV are correct.

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Definitions:

Double Helix

Double spiral; describes the three-dimensional shape of DNA.

Deoxyribose Sugar

A five-carbon sugar molecule that is a component of DNA molecules.

Hydrogen Bonds

Weak bonds that occur when a hydrogen atom in one molecule is attracted to an electronegative atom in another molecule.

Semiconservative Replication

The method by which DNA is replicated in all known cells, where each of the two strands of the DNA molecule serve as a template for the production of the complementary strand.