Which of the Following Does Not Ultimately Result in a Capital

question 34

Multiple Choice

Which of the following does not ultimately result in a capital gain or loss?

• A)Sale of a personal use asset.
• B)Sale of inventory.
• C)Gain on equipment used in a trade or business held for more than one year,if it is the only asset sale during the year.
• D)Sale of capital stock in another company.
• E)None of thesE.Inventory is always an ordinary asset because it is held in the ordinary course of a trade or business.

---

Definitions:

Agency Relationship

A legal relationship in which one party, the agent, is authorized to act on behalf of another, the principal, in business transactions.

Gratuitous Agent

An individual who acts on behalf of another without receiving any compensation or benefit for their services.

Making a Contract

The process of creating a legally binding agreement between parties, involving offer, acceptance, and consideration.

Family Business

A commercial organization in which decision-making is influenced by multiple generations of a family related by blood or marriage.