(TCO E) Josh sold a piece of business equipment that had an adjusted basis to him of
$50,000. In return for the equipment, Josh received $90,000 cash and a painting with a
fair market value of $20,000 from the buyer. The buyer also assumed Josh's $25,000
loan on the equipment. Josh paid $5,000 in selling expenses. What is the amount of
Josh's gain on the sale?
(TCO I) Ben's property, which has an adjusted basis of $25,000, is condemned by the
state government. The authorities replace his property with other qualified property
which cost them $120,000. What is Ben's recognized gain?
(TCO I) Under the cash method of tax accounting, tax deductions are generally taken
The liability arises
Payment is made
The expense is actually incurred
None of the above
(TCO D) Sean, a calendar year taxpayer, purchased stock on June 18, 2006, for $8,000.
The stock became worthless on June 4, 2007. What is Sean's loss in 2007?
$8,000 short-term capital loss
$8,000 long-term capital loss
$8,000 itemized deduction for investments