Dorothy Operates a Pet Store as a Sole Proprietorship

question 2

Essay

Dorothy operates a pet store as a sole proprietorship. During the year, she sells the business to Florian for $200,000. The assets sold and the allocation of the purchase price are as follows:

Dorothy acquired the building in 1997 for $100,000 of which $20,000 was allocated to the land. She paid $40,000 for the equipment in the same year. What are the tax consequences of the liquidation for Dorothy?

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Definitions:

Product Category

A classification of products that share common features or are aimed at meeting a similar need or interest.

Strategic Edge

The unique advantage a company gains over competitors by implementing effective strategies that leverage its strengths or market conditions.

Marketing Advantage

The competitive edge or superiority a company has over its rivals in attracting and retaining customers.

Marketing Mix

A set of actions, or tactics, that a company uses to promote its brand or product in the market, typically encapsulated by the four Ps: Product, Price, Place, and Promotion.