Sale of an Asset for Less Than Book Value Creates

Multiple Choice

Sale of an asset for less than book value creates an operating loss that effectively reduces the company's taxes by an amount equal to ____ times ____.

A) one-half the loss; the company's marginal tax rate
B) the loss; one minus the company's marginal tax rate
C) one-half the loss; one minus the company's marginal tax rate
D) the loss; the company's marginal tax rate