"Tiny Dancer" is the name of a bronze figurine created by artist Diego Ossa. The owner recently recognized a $43,500 gain on sale of the figurine. Which of the following statements is false?
A) If Diego Ossa was the seller, the gain is ordinary.
B) If a commercial art gallery that had held Tiny Dancer in its inventory was the seller, the gain is ordinary.
C) If a private collector who purchased Tiny Dancer from an art gallery was the seller, the gain is capital gain.
D) None of these choices are false.

Question

Quizplus · Accepted Answer

All the statements provided are true based on the context of tax treatment for different types of sellers. Artists and commercial galleries typically report gains as ordinary income because the items sold are considered inventory or part of the ordinary course of business. In contrast, a private collector would report the gain as a capital gain, as the item is considered a capital asset.

"Tiny Dancer" Is the Name of a Bronze Figurine Created