Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
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Textbook Question
Chapter 4, Problem 1MCQ
All of the following assets are capital assets, except
- A personal automobile
- IBM stock
- A child's bicycle
- Personal furniture
- Used car inventory held by a car dealer
Expert Solution & Answer
To determine
Concept Introduction:
The term capital asset is used in the calculation of capital gain or loss of the taxpayer. A capital gain or loss is calculated on the sale of capital assets. The income tax law has given an exclusive definition ofcapital assets.
To choose:The assets not considered as capital assets.
Answer to Problem 1MCQ
e.
Explanation of Solution
Explanation for correct answer:
A used car inventory held by a car dealer is a stock in trade is not covered in the definition of a capital asset. Hence option e is correct.
Explanation for incorrect answers:
a. A personal automobile is covered in the definition of capital assets. Hence this option is not correct.
b. Shares or stocks are covered in the definition of capital assets. Hence this option is not correct.
c. A child’s bicycle is covered in the definition of capital assets. Hence this option is not correct.
d. Personal furniture is covered in the definition of capital assets. Hence this option is not correct.
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Chapter 4 Solutions
Income Tax Fundamentals 2020
Ch. 4 - All of the following assets are capital assets,...Ch. 4 - Which of the following is a capital asset? Account...Ch. 4 - Yasmeen purchases stock on January 30,2018 . If...Ch. 4 - Vijay sells land and receives $5,000 cash, a...Ch. 4 - Prob. 5MCQCh. 4 - In 2019, what is the top tax rate for individual...Ch. 4 - In November 2019, Ben and Betty (married, filing...Ch. 4 - Prob. 8MCQCh. 4 - In 2019, Tim, a single taxpayer, has ordinary...Ch. 4 - Prob. 10MCQ
Ch. 4 - Prob. 11MCQCh. 4 - Prob. 12MCQCh. 4 - Kevin purchased a house 20 years ago for $100,000...Ch. 4 - Gene, a single taxpayer, purchased a house 18...Ch. 4 - Prob. 15MCQCh. 4 - John owns a second home in Palm Springs, CA....Ch. 4 - Helen, a single taxpayer, has modified adjusted...Ch. 4 - Prob. 18MCQCh. 4 - Prob. 19MCQCh. 4 - Prob. 20MCQCh. 4 - Prob. 21MCQCh. 4 - Prob. 22MCQCh. 4 - Prob. 23MCQCh. 4 - Prob. 24MCQCh. 4 - Jim has a net operating loss in 2019. If he does...Ch. 4 - Prob. 26MCQCh. 4 - Prob. 27MCQCh. 4 - In 2019, Tracy generates a $10,000 loss from an...Ch. 4 - Prob. 1PCh. 4 - Prob. 2PCh. 4 - Prob. 4PCh. 4 - Prob. 5PCh. 4 - In 2019, Michael has net short-term capital losses...Ch. 4 - Prob. 7PCh. 4 - Prob. 8PCh. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Walter, a single taxpayer, purchased a limited...Ch. 4 - Tyler, a single taxpayer, generates a net...Ch. 4 - Julie, a single taxpayer, has completed her 2019...Ch. 4 - Prob. 15P
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