A Piece of Driftwood Has a Density of 0

question 10

Multiple Choice

A piece of driftwood has a density of 0.76 g/cm³,while a piece of alloy has a density of 6.7 g/cm³.Which statement is accurate?

• A) Both the driftwood and the alloy will float on pure water.
• B) Neither the driftwood nor the alloy will float on pure water.
• C) The driftwood will sink when placed on pure water,but the alloy will float.
• D) The driftwood will float on pure water,but the alloy will sink.

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Definitions:

Recognize

In tax terminology, to report and include a transaction in taxable income for the period it was realized, regardless of whether or not payment was received.

Gain

An increase in the value of an investment or asset.

Donor's Adjusted Basis

The value used for tax purposes to determine the gain or loss when property is given as a gift, generally the cost basis of the donor at the time of the gift.

Fair Market Value

The price that property would sell for on the open market, between a willing buyer and a willing seller each having reasonable knowledge of all pertinent facts.