Laura Has Been Feeling Older Lately and Has Begun to Re-Evaluate

question 119

Multiple Choice

Laura has been feeling older lately and has begun to re-evaluate the choices she has made thus far in her life. She decides that she needs a little more excitement, so she buys a new red sports car. Her response is best considered to be an example of:

• A) a command decision
• B) the climacteric
• C) a midlife crisis
• D) a transitional event

---

Definitions:

Adjusted Basis

The value of an asset for tax purposes, adjusted for improvements, depreciation, and deductions, used to calculate gains or losses on sale or disposal.

Fair Market Value

The price at which an asset would be bought or sold in an open market.

Tax Consequences

The financial effects of transactions on tax liabilities, including how investments, income, or deductions affect taxes owed.

Basis

The initial value of an asset for tax purposes, usually the purchase price, used to calculate gains or losses when the asset is sold.