Devon Owns 30% of the Agate Company for Which His

question 31

Multiple Choice

Devon owns 30% of the Agate Company for which his basis is $200,000.He sells one-forth of his ownership interest to Bernice for $90,000.Which of the following statements is correct?

• A)If Agate is an S corporation,Devon has a recognized gain of $40,000,some of which may be capital and some of which may be ordinary income.
• B)If Agate is a C corporation,Devon has a recognized capital gain of $40,000.
• C)If Agate is a partnership,Devon has a recognized capital gain of $40,000.
• D)Only b.and c.are correct.
• E)a. ,b. ,and c.are correct.

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Definitions:

Average Sale Period

The time it takes to convert your inventory into sales, usually expressed in days.

Average Sale Period

The average sale period is the average time taken to convert inventory into sales, often used to assess the efficiency of a business's inventory management.

Average Collection Period

The average time it takes for a company to receive payments owed by its customers, indicating the effectiveness of its credit and collection policies.

Year 2

Refers to the second year of a particular time frame, project, or financial period, often used in forecasting or comparing year-over-year performance.