Eight Years Ago You Purchased an Asset for $100,000 That

question 100

Multiple Choice

Eight years ago you purchased an asset for $100,000 that has yielded a nominal capital gain of $30,000. If you sold the asset today, your inflation-adjusted capital gains would be zero due to inflation over the last eight years. The capital gains tax is 28 percent. If you sold the asset today your tax liability would be

• A) zero.
• B) $28,000.
• C) $8,400.
• D) cannot be determined without more information.

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Definitions:

Preponderance Of The Evidence

A standard of proof in civil cases that means the greater weight of the evidence must favor the party seeking to meet the burden of proof.

Standard Of Proof

The burden that the plaintiff or prosecution must meet in presenting their case; the measure by which evidence is judged to show a “preponderance of evidence” in a civil action and “beyond a reasonable doubt” in a criminal case.

Criminal Law

The branch of law that defines criminal offenses, regulates the apprehension, charging, and trial of alleged offenders, and establishes penalties and modes of treatment applicable to convicted offenders.

Prohibited Act

An action that is forbidden by law, regulations, or policies, often leading to penalties or sanctions if violated.