Multiple Choice
Elizabeth sells a painting that has a fair market value of $9,000 to Jonathan for $6,000. Which of the following statements about the tax effect of the sale is/are correct?
I.If Elizabeth is an art dealer and she sold the painting to Jonathan because she needed cash quickly, Jonathan does not recognize any income from the sale.
II.If Jonathan owns 60% of Elizabeth's company, Jonathan does not recognize any income from the sale.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.
Correct Answer:
Verified
Correct Answer:
Verified
Q99: Net collectibles gains are taxed at a
Q100: Brandon and Judy divorce during the year
Q101: The cash method of accounting for income
Q102: Southview Construction Company enters into a contract
Q103: Penny, age 45, purchased an annuity contract
Q105: Ron won a $25,000 award for his
Q106: Boomtown Construction, Inc. enters into a contract
Q107: Marta finds a chest inscribed "Jack Sparrow"
Q108: Darnel owns 10% of the stock in
Q109: Income realization may occur as a result