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Question 5
Incorrect
Bill Baxter is in the process of selling his hardware store, which he operates as a sole proprietorship. Bill has provided the following information: \rAccounts receivable: $50,000 \rInventories: 70,000 \rBuildings: 80,000 \rFranchise Agreement: 40,000 \rGoodwill: 60,000 \rLand: 80,000 \rFurniture and fixtures: 35,000 \r\rWhat is the value of Bill’s capital assets?\r
$100,000
(You Answered) $120,000
$160,000
$295,000
Question 9
Incorrect
All of the following are true regarding the "sale or exchange" requirement for capital gain treatment to apply except:
Generally, for income tax purposes, the terms 'sale' and 'exchange' have the same meanings as in everyday business transactions.
(You Answered) The term 'sale' includes both a foreclosure sale and a voluntary surrender of property by the equity owner.
A redemption or retirement of bonds is not treated as a sale or exchange of property.
Regarding a casualty loss, destruction of property (used in a trade or business) by fire, storm, or any other casualty is treated as a sale or exchange of a capital asset.